SKIN ELEMENTS LIMITED - Annual Report 2025

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Annual Report

SKIN ELEMENTS LIMITED 2025 A B N 9 0 6 0 8 0 4 7 7 9 4 and its controlled entities ANNUAL REPORT

30 June 2025

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ANNUAL REPORT 30 June 2025

ABN 90 608 047 794

Corporate directory

Current directors Peter Malone Executive Chairman Filippo (Phil) Giglia Non-Executive Director Stuart Usher Non-Executive Director

Company secretary

Stuart Usher

Registered office

Street + Postal: 1255A Hay Street West Perth WA 6005 Telephon e: +61 (0)8 6311 1900 Facsimile: +61 (0)8 6311 1999 Email: [email protected] Website: www.skinelementslimited.com

Auditors

Share registry

MUFG Corporate Markets (AU)

Street: Level 12, QV1 Building, 250 St Georges Terrace Perth WA 6000 Telephone: 1300 554 474 (within Australia) +61 1300 554 474 (International) Facsimile: +61 (0)8 6370 4203 Email: [email protected] Website: au.investorcentre.mpms.mufg.com

BDO Audit Pty Ltd

Street: Mia Yellagonga Tower 2 5 Spring Street Perth WA 6000 Telephon e: +61 (0)8 6382 4600 Facsimile: +61 (0)8 6382 4601 Website: www.bdo.com.au

Securities exchange

Australian Securities Exchange

Street: Level 40, Central Park, 152-158 St Georges Terrace Perth WA 6000 Telephone: 131 ASX (131 279) (within Australia) Telephone: +61 (0)2 9338 0000 Facsimile: +61 (0)2 9227 0885 Website: www.asx.com.au ASX Code: SKN

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ANNUAL REPORT

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

30 June 2025

ABN 90 608 047 794

Directors’ report ........................................................................................................................................................................ 1 Remuneration report ................................................................................................................................................................. 7 Auditor’s declaration of independence ................................................................................................................................... 13 Consolidated statement of profit or loss and other comprehensive income .......................................................................... 14 Consolidated statement of financial position ......................................................................................................................... 15 Consolidated statement of changes in equity ......................................................................................................................... 16 Consolidated statement of cash flows .................................................................................................................................... 17 Notes to the consolidated financial statements ...................................................................................................................... 18 Consolidated Entity Disclosure Statement .............................................................................................................................. 44 Directors’ declaration .............................................................................................................................................................. 45 Independent auditor’s report .................................................................................................................................................. 46 Corporate governance statement ........................................................................................................................................... 50 Additional Information for Listed Public Companies ............................................................................................................... 51

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SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES ABN 90 608 047 794

ANNUAL REPORT 30 June 2025

Directors’ report

Your Directors present their report on the Group, consisting of Skin Elements Limited ( Skin Elements or the Company ) and its controlled entities (collectively the Group ), for the financial year ended 30 June 2025 ( FY2025 ).

Skin Elements is listed on the Australian Securities Exchange (ASX: SKN).

1. Directors

The names of Directors in office at any time during or since the end of the year are:

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Peter Malone Executive Chairman and Chief Executive Officer Filippo (Phil) Giglia Independent Non-Executive Director Stuart Usher Independent Non-Executive Director ( the Directors or the Board )

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Directors have been in office since the start of the financial year to the date of this report unless otherwise stated. For additional information on Directors including details of the qualifications of Directors please refer to paragraph 6 Information relating to the Directors of this Directors Report.

2. Company secretary

The following persons held the position of Company Secretary at the end of the financial year:

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Stuart Usher Please refer to paragraph 6 Information relating to the Directors of this Directors Report.

3. Dividends paid or recommended

There were no dividends paid or recommended during the financial year ended 30 June 2025 (2024: $nil).

4. Significant changes in the state of affairs

During the year, the Company raised $657,184 through a 1-for-5 non-renounceable rights issue and oversubscriptions, issuing 219,061,355 new shares with attaching free options. Shareholders also approved 162,000,000 performance rights under the 2024 Equity Incentive Plan, with Class A rights vesting immediately and converting into 100,000,000 shares in December 2024. Further details are provided in sections 5.2.7 and 5.2.8 of this Directors’ report.

There have been no other significant changes in the state of affairs of the Group during FY2025 other than disclosed elsewhere in this Annual Report.

5. Operating and financial review

5.1. Nature of operations and principal activities

Skin Elements is a researcher and developer of the innovative proprietary SE Formula[TM] biotechnology. This Green Tech plant-based and organic sourced SE Formula[TM] is used in the Company’s proprietary flagship products including the SuprCuvr TGA-registered hospital-grade plant-based disinfectant, ECO-Nurture plant bio-stimulant, Invisi Shield alcohol free natural sanitiser, Soléo Organics natural and organic sunscreen, PapayaActivs natural therapeutics skincare and Elizabeth Jane Natural Cosmetics brand.

5.2. Operations review

5.2.1. Development of SE Formula™

The SE Formula™ has been developed by Skin Elements over the last 15 years and is the core of every natural product developed by Skin Elements. Products with the SE Formula™ have been scientifically proven to be high-performing while using only natural and plant-based ingredients.

Skin Elements has a three-phase development process leading into commercial scale production and sales:

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Phase 1 Pure research and development to undertake investigations into natural organic ingredients and processes to prepare prototype formulations.

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Phase 2 Produce test batches and undertake product trials, test marketing and regulatory certifications.

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Phase 3 Negotiate distribution agreements and commence scale up production and launch into commercialisation.

5.2.2. Eco Nurture Plant Bio-Stimulant Phase 3 commencing

ECO-Nurture is a sustainable, horticultural-specific plant bio-stimulant product developed from the plant-based SE Formula[TM] biotechnology research and development program as an effective alternative to chemical-based agricultural sprays currently used in crop disease protection globally.

During the year, Skin Elements has continued to work through the certification for wide spread adoption of ECO-Nurture for the New Zealand kiwifruit industry under Zespri’s spray list approved Zespri Crop Protection Standards. Headquartered in New Zealand, Zespri is the world’s largest marketer of kiwifruit with over $5 billion in sales annually.

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ANNUAL REPORT 30 June 2025

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ABN 90 608 047 794

Directors’ report

Assessment of ECO-Nurture on over 120 kiwifruit orchards in New Zealand over the past three growing seasons has delivered positive outcomes for kiwifruit plant protection and productivity without leaving chemical residues. ECO Nurture has demonstrated that it is effective against bacteria which has negatively impacted kiwifruit industry in addition to supporting fruit quality, yield, and appearance of the fruit with zero residual toxicity.

During the year, over 2,400 litres of ECO Nurture concentrate have been delivered to kiwifruit orchard managers in New Zealand with a further 800 litres delivered in August.

Skin Elements has now commenced the commercial roll-out of ECO-Nurture for the 2026 New Zealand kiwifruit growing season with further deliveries to follow.

5.2.3. SuprCuvr disinfectant Phase 3 commencing

SuprCuvr is a TGA-registered hospital-grade disinfectant made from the Company’s proprietary 100% plant-based SE Formula[TM] . It combines the world’s highest level of efficacy against viral and bacterial infection with a 100% plant-based organic input certified formula to present a significant market opportunity for a chemical-free disinfectant in large-scale settings such as food manufacturing, hospitality retail businesses, public transport, and health services.

SuprCuvr is currently being used by Spotless cleaning contractors in the Melbourne city trains with a further 900 litres delivered in August 2025. SuprCuvr is also undergoing trials with the agriculture sector in New Zealand. SuprCuvr is TGAregistered in Australia and has MPI registration in New Zealand.

5.2.4. Soléo Organics Phase 3 commercialisation negotiations

Soléo Organics is an award-winning, natural and organic sunscreen formulation, providing a highly effective, highperformance chemical-free sunscreen range. It was the first application borne out of Skin Elements’ SE Formula[TM] research and development program.

Soléo Organics is globally recognised, with certification by the TGA in Australia, FDA in the United States, Health Canada, the European Union and the United Kingdom, and the Ministry of Health, Japan.

Skin Elements is working on the development of a new, premium SPF50 Soléo Organics sunscreen for the domestic market, as well as negotiations with a leading health retail group in the United Kingdom for distribution of the Soléo Organics sunscreen formulation under white label.

5.2.5. PapayaActivs Phase 2 completion

Skin Elements continued to progress Phase 2 improvements in the PapayaActivs formulation and expansion of the product range. The Company also undertook small scale Phase 3 test market of skincare ranges through its online store.

PapayaActivs combines a high concentration of natural pawpaw extract with other active natural ingredients to help relieve the symptoms of skin conditions, like psoriasis, rashes, eczema, assist in healing of minor burns and wounds, and relieve mild muscle, joint and arthritic pain. PapayaActivs is listed on the TGA Australian Register of Therapeutic Goods.

5.2.6. Research and development ( R&D ) tax incentive grant income

During the year, Skin Elements received R&D Rebate of $1,193,629 in relation to the eligible research and development spend in the 2024 financial year.

The Company’s commitment to the continued research and development of its natural SE Formula[TM] Biotechnology sees it eligible for the Federal Government’s R&D tax incentive for the FY2025 with R&D Rebate calculation of $635,592 as at 30 June 2025.

During the year, Skin Elements received an advance of $433,256 under a R&D Rebate advance facility provided by Radium Capital in relation to the FY2025 eligible R&D expenditure.

5.2.7. Rights Issue

During the year, the Company completed a non-renounceable rights issue on the basis of 1 new share for every 5 shares held, raising $513,692 through the issue of 171,230,552 shares with attaching free options exercisable at $0.01 on or before 7 March 2028. In addition, oversubscription applications for 47,830,803 shares (with attaching options) were accepted, raising a further $143,492 as a placement under the Company’s LR7.1 capacity.

5.2.8. Performance Rights

At the 2024 Annual General Meeting, shareholders approved the issue of 100,000,000 Class A and 62,000,000 Class B performance rights under the Equity Incentive Plan. These rights were issued to Peter Malone (Executive Chairman), NonExecutive Directors Filippo (Phil) Giglia and Stuart Usher, and key management personnel Craig Piercy and Leo Fung, and were valued in accordance with accounting standards. The Class A rights vested immediately and converted into 100,000,000 fully paid ordinary shares in December 2024.

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SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES ABN 90 608 047 794

ANNUAL REPORT 30 June 2025

Directors’ report

5.2.9. Repayment of Borrowings

As approved by Shareholders at the 2024 Annual General Meeting, the Company issued 166,666,665 equity securities to Directors and Key Management for $500,000 unpaid executive services and Directors’ services in accordance with service agreements.

5.3. Financial Review

5.3.1. Key profit and loss measures

Movement (increased/ decreased) Movement $
	2025 2024
	$ $
Revenues from ordinary activities increased 53,755 Loss from ordinary activities after tax decreased 432,822 EBITDA loss decreased 192,615	469,957 416,202 (1,728,461) (2,161,283) (1,629,788) (1,822,403)

5.3.2. Key net asset measures

Movement (increased/ decreased) Movement $
	2025 2024
	$ $
Cash and cash equivalents decreased 55,423 Working capital deficit_(excluding prepayments) _decreased 274,545 Net tangible liabilities increased 304,223 Net liabilities increased 304,223	59,648 115,071 1,944,428 1,669,883 (1,937,061) (1,632,838) (1,937,061) (1,632,838)

The financial statements have been prepared on a going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the ordinary course of business.

The Group incurred a loss for the year of $1,728,461 (2024: $2,161,283 loss) and a net cash in-flow from operating activities of $233,846 (2024: $279,377 out-flow). As at 30 June 2025, the Group had a working capital deficit of $1,944,428 (2024: $1,669,883 working capital deficit) and a net asset deficit of $1,937,061 (2024: $1,632,838 a net asset deficit).

The Group’s ability to continue as a going concern depends on securing additional debt or equity funding and/or generating profits from its operations. These conditions indicate the existence of a material uncertainty that may cast significant doubt on the Group’s ability to continue as a going concern.

The Directors are confident that there will be sufficient funds for the Group to meet its obligations and liabilities and believe it is appropriate to prepare these accounts on a going concern basis for the following reasons:

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The Group continues to benefit from the Australian Government’s R&D Tax Incentive, with $1,193,626 million received during the year for FY2024 expenditure and a further $635,592 accrued to 30 June 2025, with the claim lodged subsequent to balance date.

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Additional liquidity has been secured through the R&D advance facility with Radium Capital of $433,256 received in relation to the FY2025 R&D Rebate to be repaid out of funds claimed above.

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$500,000 in outstanding fees due to Directors and key management was settled through the issue of shares, further conserving cash resources.

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Directors have confirmed they will defer repayment of balances owed until the Company is in a position to repay without affecting its ability to meet ongoing commitments.

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The Company has a strong track record of raising capital when required and will secure additional working capital through equity raising as required.

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Detailed cash flow forecasts prepared by the Directors demonstrate that the Group will have sufficient funds to meet its obligations and working capital requirements for at least 12 months from the date of this report.

While these conditions indicate the existence of a material uncertainty, the Directors believe the mitigating factors outlined above provide a strong basis to prepare the financial statements on a going concern basis. In particular, the Group’s consistent ability to access equity funding, combined with the expected receipt of R&D rebates, underpins their confidence in the Group’s ongoing viability.

Should the Group be unable to continue as a going concern, it may be required to realise assets and extinguish liabilities outside the ordinary course of business, at amounts different from those stated in the financial statements. The financial statements do not include any such adjustments.

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ANNUAL REPORT

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

30 June 2025

ABN 90 608 047 794

Directors’ report

5.4.	Key business risks
	The Group faces a range of risks, both business-specific and general, that may individually or collectively affect future
	operating and financial performance.
5.4.1.	Reputation and brand
	Sustained business success depends on the strength of Skin Elements’ brands. Product issues, counterfeit goods, supplier
	failures or negative media coverage may materially damage reputation and performance.
5.4.2.	Laws, regulations, and geopolitics
	The Group operates in multiple regulated jurisdictions. Changes in laws, tax regimes, supply chains or geopolitical conditions
	can materially impact production, distribution and sales.
5.4.3.	Cybersecurity and data
	Protecting intellectual property and confidential data is critical. Increasing cybercrime and digital data storage heighten the
	need for robust security measures.
5.4.4.	Key partnerships
	Sales and strategic initiatives rely on key markets, distributors and retailers. Underperformance or shifts in market dynamics
	may materially affect results.
5.4.5.	People and culture
	Delivery of strategic objectives depends on attracting and retaining skilled, motivated staff and maintaining strong
	leadership.
5.4.6.	Safety, health, and wellbeing
	The Group prioritises the safety and wellbeing of employees, customers and partners. A safe and supportive environment is
	essential to sustainable operations.
5.4.7.	Consumer and marketplace
	Unanticipated shifts in consumer demand, competitive pressures or disruptive events (e.g. pandemics, online growth, price
	competition) may limit growth opportunities or disrupt inventory management.
5.4.8.	Significant business interruption
	Natural disasters, pandemics, hazards or politically motivated events may disrupt supply chains, infrastructure and
	workforce, causing financial and reputational impacts.
5.4.9.	Climate and sustainability
	Limited availability of sustainable natural ingredients, together with climate-related risks, may challenge supply continuity.
	Effective management of these issues is critical to the Group’s growth and commitments.
5.4.10.	Financial and treasury
	The Group’s financial performance is sensitive to fluctuations in exchange rates, interest rates, credit conditions and capital
	markets. Broader economic or business events, including recalls or pandemics, may also impair liquidity, profitability and
	funding access. Maintaining adequate liquidity, prudent capital management and secure financing are essential to support
	operations and growth.
5.5.	Risk management
	The Board adopts a proactive approach to risk management and is ultimately responsible for ensuring that risks and
	opportunities are identified in a timely manner, and that the Group’s objectives and activities remain aligned with them.
	To support this, the Board has established an Audit and Risk Committee, operating under a Board-approved charter, to
	assist in overseeing governance, risk management, compliance, and related practices.
5.6.	Events Subsequent to Reporting Date
	There are no material after balance date events that are not covered in this Directors' report or within the financial
	statements as disclosed in note 13_Events subsequent to reporting date._
5.7.	Future developments, prospects, and business strategies
	Likely developments in the operations of the Group have been disclosed in the_Operating and financial review_section of
	the Directors’ Report.
	Other likely developments, future prospects, and business strategies of the operations of the Group and the expected
	results of those operations, not otherwise disclosed in this report, have not been included in this report as the Directors
	believe that the inclusion of such information would be likely to result in unreasonable prejudice to the Group.

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SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES ABN 90 608 047 794

ANNUAL REPORT 30 June 2025

Directors’ report

5.8. Environmental regulations

The Group’s operations are not subject to significant environmental regulation in Australia.

The Directors have considered the National Greenhouse and Energy Reporting Act 2007 (NGER Act), which establishes a national framework for reporting greenhouse gas emissions, energy use, and production. At the current stage of development, the NGER Act has no effect on the Company for the current or subsequent financial year. This position will be reassessed as circumstances require.

6. Information relating to the Directors

Peter Malone	 Executive Chairman and Chief Executive Officer_(Appointed 4 September 2015)_
	Non-independent
Qualifications	 B.Arch. MBA
Experience	 Mr Malone has over 30 years’ experience in global financial markets and has been responsible
	for raising AUD$100m+ for technology development companies. He has a proven track record in
	developing and managing technology development programs, from idea stage to reality. Previous
	CEO to listed companies, he has a master’s degree from UWA and has taught and consulted in
	Australia, USA, Europe and Asia in business and management. Mr Malone is responsible for the
	strategic direction of the Group and is Managing Director and CEO of the Company.
Interest in equity	 166,035,739 Ordinary Shares
	25,614,520 Options
	50,000,000 Performance rights
Directorships in Listed	 None
Entities (Past 3 Years)
Filippo (Phil) Giglia	 Non-Executive Director_(Appointed 22 November 2017)_
	Chairman of the Audit Committee, Remuneration Committee and Nomination Committee
	Independent
Qualifications	 B.Bus, CA, Registered Company Auditor, Registered Tax Agent
Experience	 Mr Giglia joined the Skin Elements’ Board in November 2017. Mr Giglia is a Chartered Accountant
	with more than 25 years’ experience in senior roles, with a strong depth of expertise in the small
	to medium enterprise sector. Mr Giglia worked for leading global accountancy firm Price
	Waterhouse Coopers from 1985 to 1991. He is the founder and principal of Perth accountancy
	practice, Giglia & Associates, and is also a director of Global Marine Enclosures Pty Ltd. Mr Giglia
	has a Bachelor of Business (with Distinction) from Curtin University, and is a Member of the
	Institute of Chartered Accountants in Australia and New Zealand.
Interest in equity	 33,031,132 Ordinary Shares
	4,683,402 Options
	10,000,000 Performance rights
Directorships in Listed	 None
Entities (Past 3 Years)
Stuart Usher	 Non-Executive Director_(Appointed on 17 January 2023)_
	Company Secretary_(Appointed on 17 January 2023)_
	Independent
Qualifications	 B.Bus, CPA, Grad Dip CSP, MBA, FGIA, FCIS
Experience	 Mr Usher is a CPA and Chartered Company Secretary with 25 years of extensive experience in the
	management and corporate affairs of public listed companies. He holds an MBA from the
	University of Western Australia and has extensive experience across many industries focusing on
	Corporate & Financial Management, Strategy & Planning, Mergers & Acquisitions, and Investor
	Relations & Corporate Governance.

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ANNUAL REPORT 30 June 2025

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ABN 90 608 047 794

Directors’ report

Interest in equity

 16,947,652 Ordinary Shares 2,824,319 Options 2,000,000 Performance rights

Directorships in Listed  Story-I Limited Entities (Past 3 Years)

7. Meetings of directors and committees

During the financial year, four meetings of Directors (including committees of Directors) were held.

	DIRECTORS REMUNERATION AND AUDIT AND RISK FINANCE AND OPERATIONS
	MEETINGS NOMINATION COMMITTEE COMMITTEE COMMITTEE
	Number Number Number
	Number eligible Number eligible to Number eligible to Number eligible to Number
	to attend Attended attend Attended attend Attended attend Attended

Peter Malone	4 4 - - - - The Finance and Operations Committee comprise the full Board. The Board believes the Company is
	not currently of a size nor are its affairs of such
Filippo (Phil) Giglia	complexity as to warrant the establishment of a 4 4 - - - -
	separate committee. Accordingly, all matters
Stuart Usher	capable of delegation to such committees are considered by the full Board. 4 4 - - - -

8. Indemnifying officers or auditor

8.1. Indemnification

During the financial year, the Company paid a premium for a contract insuring Directors and officers against liabilities incurred in their roles, to the extent permitted under the Corporations Act 2001. The Company has not otherwise indemnified, or agreed to indemnify, any officer or auditor of the Company or its related bodies corporate.

8.2. Insurance premiums

The Company paid insurance premiums during the year to cover Directors and officers against certain liabilities arising from their conduct while acting in office. In accordance with the terms of the policy, the premium amount is not disclosed.

9. Options

9.1. Unissued shares under option

At the date of this report, the unissued ordinary shares of the Company under option (listed and unlisted) are as follows:

ASX Security Grant Date of Exercise Price	Number under
Code Date(s) Expiry $	Option
SKNOD 05.2023, 06.2023 31.05.2026 0.025	133,351,198
& 11.2023
SKNAS 11.2022 & 02.2023 31.10.2025 0.050	58,000,000
SKNUOH 3.2025 21.02.2028 0.010	219,061,355
	410,412,553

No person entitled to exercise the option has or has any right by virtue of the option to participate in any share issue of the Company or any other body corporate.

9.2. Shares issued on exercise of options

No ordinary shares have been issued by the Company during the financial year due to the exercise of options (2024: nil).

10. Auditor's independence and non-audit services

10.1. Auditor independence

The Company’s auditor’s, BDO Audit Pty Ltd’s ( BDO ), independence declaration under section 307C of the Corporations Act 2001 (Cth) for the year ended 30 June 2025 has been received and can be found on page 13 and forms part of this Directors’ report for the year ended 30 June 2025.

10.2. Non-audit services

During the year, BDO Corporate Tax Pty Ltd provided professional advisory services to assist the Group with the preparation of Research & Development Tax rebate registration, with fees amounting to $39,449 (2024: $38,628). Details of remuneration paid to the auditor can be found within the financial statements at note 21 Auditor's Remuneration .

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SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ANNUAL REPORT 30 June 2025

ABN 90 608 047 794

Directors’ report

As non-audit services are provided by BDO, the Board followed certain procedures to ensure that the provision of nonaudit services is compatible with, and do not compromise, the auditor independence requirements of the Corporations Act 2001 (Cth). These procedures include:

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non-audit services will be subject to the corporate governance procedures adopted by the Company and will be reviewed by the Board to ensure they do not impact the integrity and objectivity of the auditor; and

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ensuring non-audit services do not involve reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the Company, acting as an advocate for the Company or jointly sharing risks and rewards.

The Board is satisfied that the provision of non-audit services is compatible with the general standard of independence.

11. Proceedings on behalf of the Company

No person has applied to the Court under section 237 of the Corporations Act 2001 (Cth) for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings.

No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of the Corporations Act 2001 (Cth).

12. Remuneration report (audited)

This report outlines the remuneration arrangements in place for the key management personnel of Skin Elements Limited (the Company or Group or individually Skin Elements ) for the financial year ended 30 June 2025 and comparatives for the year ended 30 June 2024. The remuneration report has been audited as required by s308(3C) of the Corporations Act 2001 (Cth).

12.1. Key management personnel (KMP) covered in this report

For the purposes of this report KMP of Skin Elements are defined as those persons having authority and responsibility for planning, directing, and controlling the major activities of the Company, directly or indirectly, including any director (whether executive or otherwise) of the Company and all KMP. KMP comprise:

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Directors

Peter Malone Executive Chairman and Chief Executive Officer
Filippo (Phil) Giglia Non-Executive Director
Stuart Usher Non-Executive Director

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Other KMP

Leo Fung Chief Technical Advisor
Craig Piercy Chief Financial Officer

There have been no other changes since the end of the reporting period.

12.2. Principles used to determine the nature and amount of remuneration

12.2.1. Remuneration Policy

The Board has established a Nomination and Remuneration Committee to assist in fulfilling its governance and oversight responsibilities. Ultimate responsibility for nomination and remuneration practices rests with the Board. The Committee’s key functions include:

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assisting the Board in examining the selection and appointment practices of the Company;

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ensuring remuneration is equitable, transparent, and sufficient to attract and retain executives and directors who create sustainable value for members and stakeholders;

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monitoring the Board’s composition, size, and commitment to ensure effective performance;

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reviewing Board succession planning, renewal, and performance evaluation processes, and ensuring rewards align with outcomes;

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monitoring diversity within the Company and reporting against any Board-approved diversity policy;

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reviewing remuneration, recruitment, retention, and termination policies for the Board and senior executives; and

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ensuring compliance with relevant legislation, including the ASX Listing Rules and the Corporations Act 2001 (Cth).

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ANNUAL REPORT 30 June 2025

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ABN 90 608 047 794

Directors’ report

12. Remuneration report (audited)

12.2.2. Remuneration structure

The Group’s policy for determining the nature and amount of remuneration of KMP is as follows:

a. Non-Executive Directors – Mr Filippo (Phil) Giglia and Mr Stuart Usher

Non-Executive Director remuneration is set by the Board, based on recommendations of the Nomination and Remuneration Committee and an assessment of each Director’s contribution.

The maximum aggregate annual remuneration payable to non-executive Directors is $500,000, as approved by shareholders under the Company’s Constitution, the ASX Listing Rules and the Corporations Act 2001 (Cth). Within this limit, fees are currently set at $60,000 p.a. for each Director. An additional $20,000 p.a. is payable to the Chairman of the Audit and Risk Committee and the Nomination and Remuneration Committee (Mr Giglia).

b. Executive Directors and other Senior Executives

The Company’s remuneration policy seeks to align executive remuneration with shareholder interests and to attract and retain appropriately qualified executives. Remuneration is designed to reflect competitive market conditions and link individual rewards to both financial and non-financial performance outcomes.

The Board, through the Nomination and Remuneration Committee , is assessing and implementing an executive reward framework to ensure remuneration is competitive, performance-based, and aligned with results delivered.

12.2.3. Performance-based remuneration – Short-term and long-term incentive structure

The Board periodically reviews the Company’s short- and long-term incentive arrangements to ensure alignment with shareholder interests.

a. Short-term incentives

No short-term incentives in the form of cash bonuses were granted during the year.

b. Long-term incentives

The Company maintains an Equity Incentive Plan under which Performance Rights, Options, or Restricted Shares may be granted to Directors, employees, or contractors. For the year ended 30 June 2025, executive remuneration comprised fixed base amounts at or below market levels, except as disclosed under Share-based Compensation – Employee Incentive Plan .

The Plan is designed to align executive and shareholder interests through performance hurdles, typically requiring achievement of share price targets above the issue price and expiring within defined timeframes. Executive Directors remain eligible to participate in both short-term and long-term incentive arrangements introduced by the Company or its subsidiaries from time to time.

The relative proportions of executive remuneration that are fixed or at risk is outlined below:

Group KMP	Proportions of elements of remuneration	Proportions of elements of remuneration
Contract commencement / termination date	not related to performance	related to performance
	(Fixed remuneration)	(At Risk – LTI)
	2025 2024	2025 2024
	% %	% %
Peter Malone Appt 4.9.2015(1) Filippo (Phil) Giglia Appt 22.11.2017 Stuart Usher Appt 17.01.2023 Craig Piercy Appt 29.11.2019(1) Leo Fung Appt 18.02.2019(1)	58.9 100 100 100 100 100 65.0 100 65.0 100	41.1 Nil Nil Nil Nil Nil 35.0 Nil 35.0 Nil

(1) These appointment dates are for the ultimate holding company Skin Elements Limited. Mr Malone, Mr Piercy, and Mr Fung were appointed as executives of wholly owned subsidiary SE Operations Pty Ltd on 1 March 2005.

12.2.4. Service agreements

Remuneration and terms of employment for other key management personnel are formalised in consultancy and employment agreements. The major provisions relating to remuneration to existing directors are set out below.

PAGE | 8

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES ABN 90 608 047 794

ANNUAL REPORT 30 June 2025

Directors’ report

12. Remuneration report (audited)

a. Executive Agreement
(1) Peter Malone Executive Chairman

The Company has a consultancy agreement with Boston Technology Management Pty Ltd ( Boston Tech ) (the Boston Consultancy Agreement ). Through this arrangement, Mr Malone serves as Executive Chairman and Chief Executive Officer. Boston Tech receives $26,000 per month (plus GST) for at least 100 hours of service, and is reimbursed for reasonable expenses.

The agreement is ongoing until terminated by either party, requiring three months’ written notice (or less in cases of material breach) or payment in lieu. On termination, the Company must pay Boston Tech an amount equivalent to consulting fees payable over the notice period.

(2) Leo Fung Chief Technical Advisor

The Company has a consultancy agreement with Blackridge Group Pty Ltd ( Blackridge ) (the Blackridge Consultancy Agreement ), under which Mr Fung serves as Chief Technical Advisor. Blackridge receives $14,690 per month (plus GST) for at least 100 hours of service, plus reimbursement of reasonable expenses.

The agreement is ongoing until terminated by either party, with the same standard provisions of three months’ notice (or less in cases of material breach) or payment in lieu. On termination, the Company must pay Blackridge an amount equivalent to fees payable over the notice period.

(3) Craig Piercy Chief Financial Officer

Mr Piercy is engaged as Chief Financial Officer under the Boston Consultancy Agreement . Boston Tech receives $14,690 per month (plus GST) for at least 100 hours of service, plus reimbursement of reasonable expenses.

The agreement is ongoing until terminated by either party, with standard provisions requiring three months’ written notice (or less in cases of material breach) or payment in lieu. On termination, the Company must pay Boston Tech an amount equivalent to fees payable over the notice period. These amounts are disclosed in the Remuneration Report below.

12.2.5. Engagement of Remuneration Consultants

During the financial year, the Company did not engage any remuneration consultants.

12.2.6. Relationship between Remuneration of KMP and Earnings

In assessing the Group’s performance and shareholder value, the Board considers the following indicators for the current and preceding four financial years, where applicable. While the C orporations Act 2001 (Cth) requires disclosure of these financial performance measures, they may differ from those used to determine variable remuneration for KMPs. As such, a direct correlation between reported performance metrics and variable remuneration may not always exist:

As at 30 June	2025	2024	2023	2022	2021
Revenue ($)	469,957	416,202	194,131	1,408,330	288,741
Loss for the year attributable to owners of the Company ($)	(1,728,461)	(2,161,283)	(11,416,168)	(1,580,910)	(3,042,523)
Basic earnings per share (cents)	(0.22)	(0.39)	(2.61)	(0.40)	(0.87)
Dividend payments ($)	Nil	Nil	Nil	Nil	Nil
Share price (cents per share)1	0.30	0.30	0.80	2.60	10.00
Increase/(decrease) in share price (%)	-	(62.50)	(69.23)	(74.00)	25.00

1 FY2021: At last trade date, 14 January 2021. Company at the 30 June 2021 balance date was suspended

12.2.7. Voting and comments made at the Company’s 2023 and 2024 Annual General Meeting (AGM)

At the AGMs held on 29 November 2024, the remuneration reports for the 2023 and 2024 financial year were approved as follows:

==> picture [10 x 10] intentionally omitted <==

2023 118,279,153 votes in favour (97.73%), 2,743,972 votes against (2.27%) and 24,356,768 abstentions; and

==> picture [10 x 10] intentionally omitted <==

2024 121,899,855 votes in favour (97.80%), 2,743,972 votes against (2.20%) and 24,331,768 abstentions.

PAGE | 9

ANNUAL REPORT 30 June 2025

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ABN 90 608 047 794

Directors’ report

12. Remuneration report (audited)

12.3. KMP remuneration

KMP remuneration expenses for current and prior years are shown below in accordance with Australian Accounting Standards:

2025– Group
	Short-term benefits Post- Long-term Termination Equity-settled share- Total
Group KMP	employment benefits benefits benefits based payments Salary, fees and leave Profit share and bonuses Non- monetary Other Super- annuation Other Equity Performance Rights(5)

	$ $ $ $ $ $ $ $ $ $
Peter Malone(1)	271,200 - - - - - - - 190,000 461,200
Filippo (Phil) Giglia(2)	80,000 - - - - - - - - 80,000
Stuart Usher(4)	90,000 - - - - - - - - 90,000
Craig Piercy(1)	176,291 - - - - - - - 95,000 271,291
Leo Fung(3)	176,291 - - - - - - - 95,000 271,291
	793,782 - - - - - - - 380,000 1,173,782


2024 – Group
	Short-term benefits Post- Long-term Termination Equity-settled share- Total
Group KMP	employment benefits benefits benefits based payments Salary, fees and leave Profit share and bonuses Non- monetary Other(7) Super- annuation Other Equity Performance Rights(6) (net of contra expense)

	$ $ $ $ $ $ $ $ $ $
Peter Malone(1) Filippo (Phil) Giglia(2) Stuart Usher(4) Craig Piercy(1) Leo Fung(3)	271,200 - - - - - - - (222,870) 48,330 60,000 - - 20,000 - - - - (44,574) 35,426 90,000 - - - - - - - - 90,000 176,291 - - - - - - - - 176,291 176,291 - - - - - - - - 176,291
	773,782 - - 20,000 - - - - (267,444) 526,338

(1) Peter Malone’s and Craig Piercy’s fees are paid to Boston Technology Management Pty Ltd.

(2) Filippo (Phil) Giglia fees paid to Colosseum Securities Pty Ltd; agreement commenced on 22 November 2017.

(3) Leo Fung’s fees are paid to Blackridge Group Pty Ltd who engage Leo Fung.

(4) Stuart Usher receives director fees and company secretary fees through two service entities. Mr Ushers company secretary fees are mandated at $2,500 per month, on an ongoing basis.

(5) In 2025, Messrs Malone, Piercy, and Fung, were granted 100 million 2024 Class A rights, valued at $190,000; and Messrs Malone, Giglia, and Usher were granted 62 million 2024 Class B rights, valued at $nil, both detailed in section 12.4.2 of this remuneration.

(6) In 2024, the 2022 Class B performance rights held by Messrs Malone and Giglia were derecognised as there was no probability of meeting vesting conditions (see note 18.2.2a). Both the 2024-year expense and prior period amounts previously recognised were reversed through a contra-expense in share-based payments.

(7) In 2024, o ther short-term benefits for Filippo (Phil) Giglia represent a back-pay of audit committee fees for the 2023 financial year.

12.4. Share-based compensation

12.4.1. Employee Incentive Plan

The Company has established an Equity Incentive Plan ( EIP ) to assist in the motivation, retention and reward of senior management and other employees. The EIP is designed to align the interest of senior management and other employees with the interest of Shareholders by providing an opportunity for participants to receive an equity interest in the Company. The Company is currently assessing the suitability of this plan to achieve the proposed objectives.

PAGE | 10

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES ABN 90 608 047 794

ANNUAL REPORT 30 June 2025

Directors’ report

12. Remuneration report (audited)

12.4.2. As at 30 June 2025 the Company had the following securities on issue/lapse in connection with KMP share-based payments:

2025– Group	Rights at the Value of Number of Value of Number of
	start of the rights at rights vested rights at rights lapsed Value at
Type of	year/grant date grant date(1) during the year vesting date(1) during the year lapse date
Group KMP rights	No. $ No. $ No. $
Peter Malone 2024 Class A	50,000,000 190,000 (50,000,000) 190,000 - -
Craig Piercy 2024 Class A	25,000,000 95,000 (25,000,000) 95,000 - -
Leo Fung 2024 Class A	25,000,000 95,000 (25,000,000) 95,000 - -
Peter Malone 2024 Class B	50,000,000 - - - - -
Filippo (Phil) Giglia 2024 Class B	10,000,000 - - - - -
Stuart Usher 2024 Class B	2,000,000 - - - - -
	162,000,000 380,000 (100,000,000) 380,000 - -

(1) The value at grant date was calculated in accordance with AASB 2 Share-based payments for rights granted during the year. These were valued at fair value determined using binomial valuation methodology, refer to note 18.3 of the financial statement.

12.5. KMP equity holdings

12.5.1. Fully paid ordinary shares in Skin Elements Limited held by each KMP and their related entities at 30 June 2025

2025– Group	Balance at start	Received during	Received during the		Balance at end
	of year or date of	the year as	year on the exercise	Other changes	of year or date
Group KMP	appointment	remuneration	of options or rights	during the year(1)	of resignation
	No.	No.	No.	No.	No.
Peter Malone	31,743,116	-	50,000,000	84,292,623	166,035,739
Filippo (Phil) Giglia	5,069,277	-	-	27,961,855	33,031,132
Stuart Usher	-	-	-	16,947,652	16,947,652
Craig Piercy	14,253,565	-	25,000,000	51,929,776	91,183,341
Leo Fung	24,331,768	-	25,000,000	53,946,353	103,278,121
	75,397,726	-	100,000,000	235,078,259	410,475,985

(1) Other changes include settlement of amounts as per note 18.2.1b, and purchases through a rights issue and a placement as detailed below:

KMP	Settlement of Shares	amounts owing $	Additional acquisitions
Peter Malone	56,620,000	$169,860	Rights issue and placement
Filippo (Phil) Giglia	14,123,333	$42,370	Rights issue and placement
Stuart Usher	14,123,333	$42,370	Rights issue
Craig Piercy	36,733,333	$110,200	Rights issue
Leo Fung	36,733,333	$110,200	Rights issue and placement

12.5.2. Options in Skin Elements Limited held by each KMP and their related entities at 30 June 2025

2025 – Group	Balance at start of year or Granted as Remuneration Exercised Other changes Balance at end of year or Vested and

Group KMP	appointments during the year during the year during the year resignation Exercisable Not Vested
	No. No. No. No. No. No. No.
Peter Malone	5,290,520 - - 21,324,000 26,614,520 26,614,520 -
Filippo (Phil) Giglia	844,880 - - 3,838,522 4,683,402 4,683,402 -
Stuart Usher	- - - 2,824,319 2,824,319 2,824,319 -
Craig Piercy	3,256,429 - - 14,458,230 17,714,659 17,714,659 -
Leo Fung	4,055,295 - - 17,213,020 21,268,315 21,268,315 -
	13,447,124 - - 59,658,091 73,105,215 73,105,215 -

PAGE | 11

ANNUAL REPORT 30 June 2025

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ABN 90 608 047 794

Directors’ report

12. Remuneration report (audited)

12.5.3. Performance Rights in Skin Elements Limited held by each KMP and their related entities at 30 June 2025

2025 – Group	Balance at start of year or Granted as remuneration Converted Other changes Balance at end of year or Vested and

Group KMP	appointments during the year(1) during the year during the year resignation convertible Not Vested
	No. No. No. No. No. No. No.
Peter Malone	50,000,000 100,000,000 (50,000,000) (50,000,000) 50,000,000 - 50,000,000
Filippo (Phil) Giglia	10,000,000 10,000,000 - (10,000,000) 10,000,000 - 10,000,000
Stuart Usher	- 2,000,000 - - 2,000,000 - 2,000,000
Craig Piercy	- 25,000,000 (25,000,000) - - - -
Leo Fung	- 25,000,000 (25,000,000) - - - -
	60,000,000 162,000,000 (100,000,000) (60,000,000) 62,000,000 - 62,000,000

(1) In 2025, Messrs Malone, Piercy, and Fung, were granted 100 million 2024 Class A rights, valued at $190,000; and Messrs Malone, Giglia, and Usher were granted 62 million 2024 Class B rights, valued at $nil, both detailed in section 12.4.2 of this remuneration.

(2) The 2022 Class B performance rights were derecognised in the prior year due to a nil probability of meeting the vesting conditions by the milestone dates, as outlined in note 18.2.2a. Consequently, current year amounts and historic charges previously recognised were reversed through a contra-expense in share-based payments. (see).

12.6. Other Equity-related KMP Transactions

There were no other equity-related KMP transactions beyond the option, right, and shareholdings disclosed above.

12.7. Other transactions with KMP and or their related parties

	Payable Balance(1)
Entity Nature of transactions KMP	2025 2024
	$ $
Boston Technology Management Pty Ltd Service Fees Peter Malone 220,164 360,462 Colosseum Securities Pty Ltd Director’s fee Filippo (Phil) Giglia 158,102 147,472 Spitfire Corporate Advisory Pty Ltd Director’s fee Stuart Usher 89,291 74,161 Geneva Partners Pty Ltd Company secretary fees Stuart Usher 57,750 24,750 Boston Technology Management Pty Ltd Service Fees Craig Piercy 286,419 335,086 Boston Technology Management Pty Ltd R&D Costs(2) Craig Piercy, Peter Malone 673,503 816,199 Blackridge Pty Ltd Service Fees Leo Fung 191,630 221,558 1,676,859 1,979,688
	1,676,859 1,979,688

(1) Balances are classified as current on statement of financial position under note 5.4.1 of Trade and other payables.

(2) R&D Costs provided by Boston Technology Management Pty Ltd for R&D project materials, formulations, testing and R&D contractors and consultants. This amount was recognised as an expense in the corresponding year.

KMP have confirmed they will not call on balances owed until the Company has capacity to repay without affecting its going concern status or ability to meet other liabilities as they fall due.

No other transactions occurred beyond those disclosed in this Remuneration Report or note 16 Related party transactions .

END OF REMUNERATION REPORT

This Report of the Directors, incorporating the Remuneration Report, is signed in accordance with a resolution of directors made pursuant to s.298(2) of the Corporations Act 2001 (Cth).

==> picture [208 x 34] intentionally omitted <==

PETER MALONE

Executive Chairman

Dated this Tuesday, 30 September 2025

PAGE | 12

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES ABN 90 608 047 794

ANNUAL REPORT 30 June 2025

AUDITOR’S DECLARATION OF INDEPENDENCE

PAGE | 13

ANNUAL REPORT

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

30 June 2025

ABN 90 608 047 794

Consolidated statement of profit or loss and other comprehensive income for the year ended 30 June 2025

for the year ended 30 June 2025
Note	2025 2024
	$ $
Continuing operations Revenue 2.1 Cost of sales Gross profit Other income 2.2 Administrative and other costs Research and development costs Selling and distribution costs Operating loss Interest and finance costs Impairment expense 3.5 Put option agreement fees expensed Loss before tax 3.1 Income tax benefit 4.1 Net loss for the year Other comprehensive income, net of income tax Other comprehensive income for the year, net of tax Total comprehensive income attributable to members of the parent entity Earnings per share: Basic and diluted loss per share (cents per share) 17.4	469,957 416,202 (63,665) (54,328)
	406,292 361,874 637,849 1,197,149 (1,441,541) (822,228) (1,190,906) (2,487,755) (45,319) (74,017)
	(1,633,625) (1,824,977) (94,836) (81,851) - (254,455) - -
	(1,728,461) (2,161,283) - -
	(1,728,461) (2,161,283)
	- -
	- -
	(1,728,461) (2,161,283)
	₵ ₵ (0.22) (0.39)

The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the accompanying notes.

PAGE | 14

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ANNUAL REPORT 30 June 2025

ABN 90 608 047 794

Consolidated statement of financial position

as at 30 June 2025

Consolidated statement of financial position as at 30 June 2025
Note	2025 2024
	$ $
Current assets Cash and cash equivalents 5.1 Trade and other receivables 5.2 Inventories 6.1 Other current assets 5.3.1 Total current assets Non-current assets Right-of-use asset Intangible assets 6.2 Total non-current assets Total assets Current liabilities Trade and other payables 5.4.1 Borrowings 5.5.1 Total current liabilities Total liabilities Net (asset deficiency) / assets Equity Issued capital 7.1.1 Reserves 7.2 Accumulated losses Total equity (deficiency)	59,648 115,071 653,197 1,258,884 - 31,908 5,096 28,680
	717,941 1,434,543
	2,271 8,365 - -
	2,271 8,365
	720,212 1,442,908
	2,212,883 2,344,019 444,390 731,727
	2,657,273 3,075,746
	2,657,273 3,075,746
	(1,937,061) (1,632,838)
	- - 25,868,692 24,444,454 335,827 335,827 (28,141,580) (26,413,119)
	(1,937,061) (1,632,838)

The consolidated statement of financial position is to be read in conjunction with the accompanying notes.

PAGE | 15

ANNUAL REPORT

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

30 June 2025

ABN 90 608 047 794

Consolidated statement of changes in equity

for the year ended 30 June 2025

for the year ended 30 June 2025
Note Balance at 1 July 2023 Loss for the year attributable to owners of the parent Other comprehensive income for the year attributable to the owners of the parent Total comprehensive income for the year attributable to the owners of the parent Transaction with owners, directly in equity	Share-based Total
	Issued Accumulated payment equity
	capital losses reserve (deficiency)
	$ $ $ $
	24,244,454 (24,464,349) 824,698 604,803 - (2,161,283) - (2,161,283) - - - -
	- (2,161,283) - (2,161,283)

Shares issued during the year_(net of costs)_ 7.1.1	200,000 - - 200,000
Share-based payments during the year:rights 7.4.1	- - (276,358) (276,358)
Transfers to/(from) reserves 7.4.1	212,513 (212,513) -
Balance at 30 June 2024 Balance at 1 July 2024 Loss for the year attributable to owners of the parent Other comprehensive loss for the year attributable to the owners of the parent Total comprehensive loss for the year attributable to the owners of the parent Transaction with owners, directly in equity Shares issued during the year_(net of costs) 7.1.1 Share-based payments during the year:_rights 7.4.1 Conversion of Class A performance rights 7.1.1 Balance at 30 June 2025	24,444,454 (26,413,119) 335,827 (1,632,838)

	24,444,454 (26,413,119) 335,827 (1,632,838)

	- (1,728,461) - (1,728,461)

	- - - -

	- (1,728,461) - (1,728,461)

	1,044,238 - - 1,044,238
	- - 380,000 380,000
	380,000 - (380,000) -
	25,868,692 (28,141,580) 335,827 (1,937,061)

The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes.

PAGE | 16

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ANNUAL REPORT

30 June 2025

ABN 90 608 047 794

Consolidated statement of cash flows

for the year ended 30 June 2025

Consolidated statement of cash flows for the year ended 30 June2025
Note	2025 2024
	$ $
Cash flows from operating activities Receipts from customers Payments to suppliers and employees Receipt of_Research and development tax incentive_grant income Interest paid and facility fees Interest received Net cash used in operating activities 5.1.2 Cash flows from investing activities Net cash used in investing activities Cash flows from financing activities Proceeds from issue of shares 7.1.1 Share issue costs Proceeds from borrowings 5.1.2b Repayments of borrowings 5.1.2b Net cash provided by financing activities Net decrease in cash and cash equivalents held Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year - - 5.1	484,391 403,821 (1,351,595) (1,734,801) 1,193,606 1,129,934 (94,836) (81,851) 2,280 3,520
	233,846 (279,377)

	- -
	657,184 200,000 (109,116) (39,708) 523,166 983,413 (1,360,503) (1,107,689)
	(289,269) 36,016
	(55,423) (243,361) 115,071 358,432
	59,648 115,071

The consolidated statement of cash flows is to be read in conjunction with the accompanying notes.

PAGE | 17

ANNUAL REPORT 30 June 2025

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ABN 90 608 047 794

Notes to the consolidated financial statements

for the year ended 30 June 2025

In preparing the 2025 financial statements, Skin Elements Limited has grouped notes into sections under five key categories:

Section A: How the numbers are calculated ............................................................................................................................ 19 Section B: Risk.......................................................................................................................................................................... 33 Section C: Group structure ...................................................................................................................................................... 36 Section D: Unrecognised items ................................................................................................................................................ 37 Section E: Other Information ................................................................................................................................................... 38

Material accounting policies specific to each note are included within that note. Accounting policies that are determined to be non-material are not included in the financial statements.

The financial report is presented in Australian dollars, except where otherwise stated.

Company details

The registered office of the Company is: Street + Postal: 1255A Hay Street West Perth WA 6005 Australia

PAGE | 18

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ANNUAL REPORT 30 June 2025

ABN 90 608 047 794

Notes to the consolidated financial statements

for the year ended 30 June 2025

SECTION A. HOW THE NUMBERS ARE CALCULATED

This section provides additional information about those individual line items in the financial statements that the Directors consider most relevant in the context of the operations of the entity, including:

(a) accounting policies that are relevant for an understanding of the items recognised in the financial statements. These cover situations where the accounting standards either allow a choice or do not deal with a particular type of transaction.
(b) analysis and sub-totals.
(c) information about estimates and judgements made in relation to particular items.

Note 1 Statement of material accounting policies

This note provides a list of the material accounting policies adopted in the preparation of these consolidated financial statements to the extent they have not already been disclosed in the other notes above. These policies have been consistently applied to all the years presented, unless otherwise stated.

1.1	Basis of preparation
1.1.1	Reporting Entity
	Skin Elements Limited (Skin Elementsorthe Company) is a listed public company limited by shares, incorporated and
	domiciled in Australia. These consolidated financial statements comprise the Company and its controlled entities (the Group)
	and have been prepared as a for-profit entity. The Group is primarily engaged in the research and development of its
	proprietary SE Formula™ biotechnology.
	In accordance with the_Corporations Act 2001_(Cth), separate parent entity financial statements have not been presented.
1.1.2	Basis of accounting
	These financial statements are general purpose financial statements prepared in accordance with Australian Accounting
	Standards and Interpretations issued by the Australian Accounting Standards Board (AASB), the_Corporations Act 2001_(Cth),
	and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
	Australian Accounting Standards (AASBs) set out accounting policies that the AASB has determined result in financial statements
	providing relevant and reliable information about transactions, events and conditions. Compliance with Australian Accounting
	Standards ensures that the financial statements and notes also comply with IFRS as issued by the IASB.
	The financial statements were authorised for issue by the Directors of the Company on 30 September 2025.
1.1.3	Going Concern
	The financial statements have been prepared on a going concern basis, which contemplates the continuity of normal business
	activity and the realisation of assets and the settlement of liabilities in the ordinary course of business.
	The Group incurred a loss for the year of $1,728,461 (2024: $2,161,283 loss) and a net cash in-flow from operating activities of
	$233,846 (2024: $279,377 out-flow). As at 30 June 2025, the Group a working capital deficit of $1,944,428 (2024: $1,669,883
	working capital deficit) and a net asset deficit of $1,937,061 (2024: $1,632,838 a net asset deficit).
	The Group’s ability to continue as a going concern depends on securing additional debt or equity funding and/or generating
	profits from its operations. These conditions indicate the existence of a material uncertainty that may cast significant doubt on
	the Group’s ability to continue as a going concern.
	The Directors are confident that there will be sufficient funds for the Group to meet its obligations and liabilities and believe it
	is appropriate to prepare these accounts on a going concern basis for the following reasons:
	The Group continues to benefit from the Australian Government’s R&D Tax Incentive, with $1,193,626 million received
	during the year for FY2024 expenditure and a further $635,592 accrued to 30 June 2025, with the claim lodged subsequent
	to balance date.
	Additional liquidity has been secured through the R&D advance facility with Radium Capital of $433,256 received in relation
	to the FY2025 R&D Rebate to be repaid out of funds claimed above.
	$500,000 in outstanding fees due to Directors and key management was settled through the issue of shares, further
	conserving cash resources.
	Directors have confirmed they will defer repayment of balances owed until the Company is in a position to repay without
	affecting its ability to meet ongoing commitments.
	The Company has a strong track record of raising capital when required and will secure additional working capital through
	equity raising as required.
	Detailed cash flow forecasts prepared by the Directors demonstrate that the Group will have sufficient funds to meet its
	obligations and workingcapital requirements for at least 12 months from the date of this report.

PAGE | 19

ANNUAL REPORT 30 June 2025

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ABN 90 608 047 794

Notes to the consolidated financial statements

for the year ended 30 June 2025

Note	1 Statement of material accounting policies(cont.)
	While these conditions indicate the existence of a material uncertainty, the	Directors believe the mitigating factors outlined
	above provide a strong basis to prepare the financial statements on a going concern basis. In particular, the Group’s consistent
	ability to access equity funding, combined with the expected receipt of R&D rebates, underpins their confidence in the Group’s
	ongoing viability.
	Should the Group be unable to continue as a going concern, it may be required to realise assets and extinguish liabilities outside
	the ordinary course of business, at amounts different from those stated in the financial statements. The financial statements do
	not include any such adjustments.
1.1.4	Comparative figures
	Where required by AASBs, comparative figures have been adjusted to conform to changes in presentation for the current year.
	Where the Group retrospectively applies an accounting policy, makes a retrospective restatement, or reclassifies items, an
	additional statement of financial position is presented at the beginning of the preceding period, in addition to the minimum
	comparative information.
1.1.5	New and amended AASBs adopted by the group
	A number of amended standards became applicable for the current reporting period. The Group did not have to change its
	accounting policies or make retrospective adjustments as a result of adopting	these amended standards.
1.2	Goods and Services Tax(GST)
	Revenues, expenses and assets are recognised net of GST, except where GST incurred is not recoverable from the taxation
	authority, in which case it is recognised as part of the asset cost or expense.	Receivables and payables are stated inclusive of
	GST. Commitments and contingencies are disclosed net of GST recoverable from, or payable to, the taxation authority.
	The net GST recoverable from, or payable to, the ATO is presented as a current asset or liability. Cash flows are presented gross
	of GST, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.
1.3	Use of estimates and judgments
	The preparation of these financial statements requires management to make judgements, estimates, and assumptions that
	affect the application of accounting policies and reported amounts of assets, liabilities, income and expenses. These are based
	on historical experience and other factors considered reasonable in the circumstances. Actual results may differ from these
	estimates.
	Estimates and assumptions are reviewed on an ongoing basis. Revisions are recognised in the period of revision and future
	periods affected. Significant judgements in applying AASBs, and estimates with a significant risk of material adjustment in the
	next year, are discussed in note 1.3.1.
1.3.1	Critical accounting estimates and judgments
	Management, in consultation with the Board, considers the development,	selection and disclosure of the Group’s critical
	accounting policies and estimates. Estimates and judgements that involve	a significant risk of material adjustment to the
	carrying amounts of assets and liabilities within the next financial year are outlined below:
	a. Key estimate – Taxation..................................................................Refer note 4_Income Tax_.
	b. _Key estimate – Impairment of intangibles ..................................._Refer note 6.2		Intangible assets.
	c. Key estimate – Share-based payments ........................................_Refer note 18_Share-based payments.
1.4	Fair value
1.4.1	Fair value of assets and liabilities
	The Group measures certain assets and liabilities at fair value, either on a recurring or non-recurring basis, in accordance with
	the requirements of the applicable AASBs.
	Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
	between market participants at the measurement date.
	As fair value is a market-based measurement, observable market prices are used whenever available. Adjustments may be made
	to reflect the specific characteristics of the asset or liability. For items not traded in an active market, fair values are determined
	using valuation techniques that maximise the use of observable inputs.
	Market information is taken from the principal market for the asset or liability, or, if there is no principal market, the most
	advantageous market available at the reporting date. For non-financial assets, fair value measurement also reflects a market
	participant’s ability to generate economic benefits by using the asset in its highest and best use, or by selling it to another
	participant who would use it that way.
	The fair value of liabilities and the Group’s own equity instruments (excluding those related to share-based payment
	arrangements) is determined, where possible, by reference to observable market information. Where this is not available, other
	valuation techniques are applied and, where significant, are disclosed in the relevant notes to the financial statements.

PAGE | 20

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ANNUAL REPORT 30 June 2025

ABN 90 608 047 794

Notes to the consolidated financial statements

for the year ended 30 June 2025

Note 1 Statement of material accounting policies (cont.)

1.4.2 Fair value hierarchy

AASB 13 Fair Value Measurement requires disclosure of fair value measurements by level of the following hierarchy:

1.4.2 Fair value hierarchy AASB 13_Fair Value Measurement_requires disclosure of fair value measurements by level of the following hierarchy:	1.4.2 Fair value hierarchy AASB 13_Fair Value Measurement_requires disclosure of fair value measurements by level of the following hierarchy:	1.4.2 Fair value hierarchy AASB 13_Fair Value Measurement_requires disclosure of fair value measurements by level of the following hierarchy:	1.4.2 Fair value hierarchy AASB 13_Fair Value Measurement_requires disclosure of fair value measurements by level of the following hierarchy:
	Level 1	Level 2	Level 3
	Quoted (unadjusted) prices in active	Inputs other than quoted prices included	Unobservable inputs for the asset or
	markets for identical assets or liabilities	in Level 1 that are observable for the asset	liability.
	accessible at the measurement date.	or liability, either directly or indirectly.
	An asset or liability is categorised in its entirety within the lowest level of input that is significant to the fair value measurement.
	Transfers between levels occur when there is a change in the observability of inputs or in market activity. The Group recognises
	such transfers at the date of the event or change in circumstances that caused the transfer.
1.5	New Accounting Standards and Interpretations not yet mandatory or early adopted
	Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2025 reporting
	periods and have not been early adopted by the Group. These standards are not expected to have a material impact on the
	entityin the current or future reporting periods and on foreseeable future transactions.

Note 2 Revenue and other income Note	2025 2024
	$ $

2.1 Revenue Sales to customers 2.2 Other income Research and development tax incentive grant income Interest income	469,957 416,202
	469,957 416,202
	635,592 1,193,629 2,257 3,520
	637,849 1,197,149

2.3 Accounting policies

2.3.1 Revenue from contracts with customers

a. Recognition

The Group generates revenue from the sale and delivery of goods through online sales, direct sales by employees, and wholesalers or business customers who purchase products for resale. Online sales are made via the Skin Elements website, which establishes pricing and delivery terms. Orders from wholesalers and business customers are tailored to client requirements; however, in all cases, performance obligations are satisfied once the goods have been delivered to the customer. At 30 June 2025, the Group had no material customer contracts outstanding.

b. Revenue from selling goods

Revenue from the sale of suncare, skincare, disinfectant, and horticultural bio-stimulant products is recognised when customers obtain control of the goods, which generally occurs upon delivery. No additional products or services are bundled with these contracts. Invoices are typically payable within 30 days, with no significant financing component as payment terms are consistent with industry practice.

2.3.2 Government grants

Government grants are recognised at fair value when there is reasonable assurance that they will be received and the Group will comply with the attached conditions:

a. Research and development tax incentive (R&D incentive) is recognised at fair value when reasonable assurance of receipt exists and eligibility requirements are met. The R&D incentive received is presented in profit or loss as other income.
The Group did not benefit directly from any other forms of government assistance.

2.3.3 Interest income

Interest revenue is recognised in accordance with note 2.3.3a Finance expenses below .

a. Finance expenses

Finance expenses include interest on borrowings recognised using the effective interest method, unwinding of discounts on provisions, changes in the fair value of financial assets at fair value through profit or loss, and impairment losses on financial assets. Borrowing costs comprise interest on overdrafts, short- and long-term borrowings, and lease liabilities. Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of those assets until substantially ready for use or sale. All other borrowing costs are expensed as incurred

PAGE | 21

ANNUAL REPORT

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

30 June 2025

ABN 90 608 047 794

Notes to the consolidated financial statements

for the year ended 30 June 2025

Note 3 Expenses Note	2025 2024
	$ $

3.1 Expenses by nature Administration expenses 3.2 Advertising and marketing expenses Corporate expenses 3.3 Depreciation – RoU assets Employee benefits expense 3.4 Impairment expense 3.5 Occupancy costs Manufacturing, purchasing, and distribution costs Research and development expenses Total expenses by nature 3.1.1 Reconciliation to net profit or loss before tax reported by function Total revenue and other income Less:_Total expenses by nature Net loss before tax Note 3 Expenses(cont.) Note 3.2 Administration expenses Accounting expenses External consulting fees Interest expenses and finance facility costs Other expenses 3.3 Corporate expenses ASX fees Audit expenses Legal expenses Share Registry and shareholder communications 3.4 Employee benefits expense Directors’ fees Executive services contracts Wages and salaries – non-R&D Share-based performance rights:_amortisation 18.1	420,391 414,222 45,319 74,017 205,391 181,354 6,094 6,094 798,973 187,415 - 254,455 105,528 114,994 63,665 54,328 1,190,906 2,487,755
	2,836,267 3,774,634
	1,107,806 1,613,351 (2,836,267) (3,774,634)
	(1,728,461) (2,161,283)
	- -
	2025 2024
	$ $
	82,541 121,143 37,585 30,000 94,836 81,851 205,429 181,228
	420,391 414,222
	31,924 37,705 87,945 88,362 61,690 32,040 23,832 23,247
	205,391 181,354
	140,000 160,000 239,782 239,782 39,191 63,991 380,000 (276,358)
	798,973 187,415

PAGE | 22

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ANNUAL REPORT 30 June 2025

ABN 90 608 047 794

Notes to the consolidated financial statements

for the year ended 30 June 2025

Note 3 Expenses (cont.)

3.4.1 Accounting policy - Employee benefits
a. Short-term benefits

Liabilities for wages, salaries and annual leave expected to be settled within 12 months are measured at the undiscounted amounts the Group expects to pay, including related on-costs such as payroll tax and workers compensation insurance. Non-accumulating non-monetary benefits (for example, medical care, housing, cars, subsidised goods and services) are expensed at the net marginal cost to the Group as they are provided.

b. Other long-term benefits Liabilities for long-term employee benefits, such as long service leave, are measured at the present value of the expected future benefit earned to date, less the fair value of any plan assets. The obligation is discounted using market yields on government bonds with maturities approximating the terms of the liability. Actuarial gains and losses are recognised in profit or loss in the period in which they arise.

c. Retirement benefit obligations: Defined contribution superannuation funds Obligations for contributions to defined contribution superannuation funds are recognised as an expense in profit or loss when incurred. The Group has no further payment obligations once contributions are made.

d. Equity-settled compensation Share-based payments to employees and contractors are measured at the fair value of the equity instruments granted at the grant date. The cost is recognised over the vesting period, with a corresponding increase in equity. Amounts are adjusted to reflect the actual number of instruments that vest, except where non-vesting is due to market conditions. , except where non-vesting is due to market conditions. except where non-vesting is due to market conditions. pt where non-vesting is due to market conditions. t where non-vesting is due to market conditions. g is due to market conditions. is due to market conditions.

Share-based payments to employees and contractors are measured at the fair value of the equity instruments granted at the grant date. The cost is recognised over the vesting period, with a corresponding increase in equity. Amounts are adjusted to reflect the actual number of instruments that vest, except where non-vesting is due to market conditions. , except where non-vesting is due to market conditions. except where non-vesting is due to market conditions. pt where non-vesting is due to market conditions. t where non-vesting is due to market conditions. g is due to market conditions. is due to market conditions.

Note 3 Expenses(cont.) 3.5 Impairment expense Impairment of trade receivables	2025 2024
	$ $
	- 254,455
	- 254,455

Note 4 Income tax Note	2025 2024
	$ $

4.1 Income tax expense Current tax Deferred tax Deferred income tax expense included in income tax expense comprises: Increase / (decrease) in deferred tax assets 4.5 (Increase) / decrease in deferred tax liabilities 4.2 Reconciliation of income tax expense to prima facie tax payable The prima facie tax payable/(benefit) on loss from ordinary activities before income tax is reconciled to the income tax expense as follows: Accounting loss before tax Prima facie tax on operating loss at 25% (2024: 25%) Add / (Less) tax effect of:  Other non-deductible expenses / (non-assessable income)  Other temporary differences not recognised Income tax expense/(benefit) attributable to operating loss	- - - -
	- -
	- - - -
	- -
	(1,728,461) (2,161,283)
	(432,115) (540,321) (159,118) 566,218 591,233 (25,897)
	- -

PAGE | 23

ANNUAL REPORT 30 June 2025

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ABN 90 608 047 794

Notes to the consolidated financial statements

for the year ended 30 June 2025

Note 4 Income tax(cont.)
2025 % 2024 % 4.3 The applicable weighted average effective tax rates attributable to operating profit are as follows: Nil Nil 4.3.1 The tax rates used in the above reconciliations is the corporate tax rate of 25% payable by the Australian corporate entity on taxable profits under Australian tax law.
	2025 2024
	% %
	Nil Nil
	2025 2024
	$ $

4.4 Balance of the parent company franking account at year end 4.5 Deferred tax assets Tax losses 4.6 Intangible assets Net deferred tax assets Less deferred tax assets not recognised Net deferred tax assets 4.6 Tax losses and deductible temporary differences Unrecognised tax losses and deductible temporary differences that may be available to offset future taxable profits: Tax losses	Nil Nil
	2,595,110 2,003,877 1,869,952 1,869,952
	4,465,062 3,873,829
	4,465,062 3,873,829 (4,465,062) (3,873,829)
	- -
	2,595,110 2,003,877
	2,595,110 2,003,877

4.6.1 Potential deferred tax assets attributable to tax losses have not been recognised at 30 June 2025, as the Directors do not consider their realisation to be probable at this time. These benefits will only be available if:

i. the Group generates sufficient future taxable income;

ii. the Group continues to satisfy conditions for deductibility; and

iii. tax legislation does not adversely change.

Tax-related balances in the financial statements are based on directors’ best estimates, reflecting current legislation, the Group’s financial performance and position, and pending assessments by taxation authorities. No adjustment has been made for potential future legislative changes.

The parent company has accumulated tax losses of $10,380,440 (2024: $8,015,508) which may be available for offset against future taxable profits of the parent company in which the losses arose. The recoupment of these losses is subject to assessment by the Australian Taxation Office.

4.7 Accounting policy

The income tax expense or benefit for the year comprises current tax and movements in deferred tax assets ( DTAs ) and deferred tax liabilities ( DTLs ) arising from temporary differences and unused tax losses.

4.7.1 Current tax

The current income tax charge is based on taxable income for the period, calculated using tax rates and laws enacted or substantively enacted at the reporting date. Current tax assets and liabilities for current and prior periods are measured at the amounts expected to be recovered from, or paid to, the taxation authorities. Management evaluates positions taken in tax returns where regulations are subject to interpretation and establishes provisions where appropriate 4.7.2 Deferred tax

Deferred tax is recognised for temporary differences between the carrying amounts of assets and liabilities and their tax bases at the reporting date.

PAGE | 24

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ANNUAL REPORT 30 June 2025

ABN 90 608 047 794

Notes to the consolidated financial statements

for the year ended 30 June 2025

Note 4 Income tax (cont.)

4.7 Accounting policy (cont.)

DTLs are recognised for all taxable temporary differences except where: they arise from the initial recognition of goodwill, or from an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit; or the temporary difference relates to investments in subsidiaries, associates or joint ventures, and the timing of reversal can be controlled and it is probable that the difference will not reverse in the foreseeable future DTAs are recognised for deductible temporary differences, unused tax credits and unused tax losses to the extent it is probable that future taxable profit will be available. DTAs are not recognised where: they arise from the initial recognition of an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit; or they relate to investments in subsidiaries, associates or joint ventures, unless it is probable the difference will reverse in the foreseeable future and taxable profit will be available. The carrying amount of DTAs is reviewed at each reporting date and reduced where recovery is no longer probable. Unrecognised DTAs are reassessed and recognised when future taxable profit is considered probable. DTAs and DTLs are measured at the tax rates expected to apply when the asset is realised or the liability settled, using tax rates and laws enacted or substantively enacted at the reporting date.

4.7.3 Other matters DTAs and DTLs are offset when a legally enforceable right exists to offset current tax assets against current tax liabilities, and they relate to the same taxable entity and taxation authority. Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.

The Group accounts for refundable tax offsets, including the Australian Government’s Research and Development (R&D) tax incentive, under AASB 112. Rebates are received through the parent company’s income tax return. Further information on unrecognised DTAs attributable to tax losses is provided in note 4.6.1

Note 5 Financial assets and financial liabilities

5.1 Cash and cash equivalents	2025 2024
	$ $

Cash at bank 59,648 115,071 59,648 115,071 5.1.1 The Group's exposure to interest rate risk and a sensitivity analysis are disclosed in note 8_Financial risk management_.	59,648 115,071
	59,648 115,071
5.1.2 Cash Flow Information	2025 2024
	$ $
a. Reconciliation of cash flow from operations to loss after income tax Loss after income tax Cash flows excluded from loss attributable to operating activities: Non-cash flows in (loss)/profit from ordinary activities:  Depreciation and amortisation  Share-based payments expensed  Share-settled payment  Impairment of assets Changes in assets and liabilities, net of the effects of purchase and disposal of subsidiaries:  (Increase) / decrease in receivables and other assets  Decrease in inventories  Increase in payables  Increase / (decrease) in provisions Cash flow (used in) from operations -	(1,728,461) (2,161,283) - - 6,094 6,094 380,000 (276,358) 500,000 - - 254,455 652,397 (73,176) 23,584 325,262 400,232 1,630,687 - 14,942
	233,846 (279,377)

PAGE | 25

ANNUAL REPORT 30 June 2025

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES ABN 90 608 047 794

Notes to the consolidated financial statements

for the year ended 30 June 2025

Note 5 Financial assets and financial liabilities (cont.)

5.1 Cash and cash equivalents (cont.)

b. Reconciliation of liabilities arising from financing activities

		Non-cash changes	Non-cash changes
		Foreign	Other
	2023 Cash flows	Acquisitions exchange	2024 changes
	$ $	$ $	$ $
Other payables	300,000 (300,000) 538,251 175,727	- - - - - - 2,802 716,780
R&D loan facility
Total liabilities from	838,251 (124,273)	- - 2,802 716,780
financing activities

		Non-cash changes
		Foreign	Other
	2024 Cash flows	Acquisitions exchange	2025 changes

	$ $	$ $	$ $
Other payables	- (550,000)	- -	550,000 -
R&D loan facility	716,780 (287,337)	- -	3,813 433,256
Total liabilities from
financing activities	716,780 (837,337)	- -	553,813 433,256

c. Credit and loan standby arrangement with banks

The Group has no credit standby facilities.

d. Non-cash investing and financing activities

2025

At the Company's AGM held on 29 November 2024, shareholder approval was obtained to 166,666,665 shares in partsettlement of $500,000 owing to KMP and other parties as detailed in note 18.2.1b.

2024

None

5.1.3 Accounting policy

Cash and cash equivalents include cash on hand, deposits at call, and short-term investments with original maturities of three months or less. For the Statement of Cash Flows , bank overdrafts are included as cash and cash equivalents; in the Statement of Financial Position, they are classified as borrowings.

5.2 Trade and other receivables Note	2025 2024
	$ $

5.2.1 Current Trade receivables _Research and development tax incentive_rebate receivable 5.2.3 Other receivables	17,228 31,662 635,592 1,193,629 377 33,593
	653,197 1,258,884

5.2.2 The Group's exposure to interest rate risk and a sensitivity analysis are disclosed in note 8 Financial risk management .
5.2.3 The Group continued its development program during the year ended 30 June 2025 resulting in a claim for research and development tax incentive which has been included as a receivable at year end.

5.2.4 Accounting policy

Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any allowance for expected credit losses ( ECLs ). Receivables are generally prepaid or COD, or up to 30 days.

The Group applies the simplified approach under AASB 9, recognising lifetime ECLs on trade receivables. Impairment is assessed on an ongoing basis. Receivables considered uncollectible are written off against the allowance account, with impairment losses recognised in profit or loss in other expenses. Any recoveries of amounts previously written off are credited to other expenses.

PAGE | 26

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ANNUAL REPORT 30 June 2025

ABN 90 608 047 794

Notes to the consolidated financial statements

for the year ended 30 June 2025

Note 5 Financial assets and financial liabilities(cont.)

5.3 Other assets	2025 2024
	$ $

5.3.1 Current Prepayments – Raw materials	5,096 28,680
	5,096 28,680

5.4 Trade and other payables Note	2025 2024
	$ $

5.4.1 Current Unsecured Trade payables 5.4.2 Key management personnel related 16 Sundry payables and accrued expenses Net Goods and Services Tax payable / (receivable)	415,899 307,988 1,676,859 1,979,688 105,909 83,051 14,216 (26,708)
	2,212,883 2,344,019

5.4.2 Trade payables are non-interest bearing and usually settled within the lower of terms of trade or 60 days. As at 30 June 2025, creditors amounting to $281,930 were in excess of 60 days (2024: $166,826).
5.4.3 The Group's exposure to interest rate risk and a sensitivity analysis are disclosed in note 8 Financial risk management .

5.4.4 Accounting policy

Trade other payables are recognised initially at fair value and subsequently at amortised cost and represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. Amounts are unsecured, non-interest bearing, and usually settled within the lower of terms of trade or 60 days.

5.5 Borrowings Note	2025 2024
	$ $

5.5.1 Current R&D Rebate Advance Facility 5.5.2 Leases – motor vehicle	433,256 716,780 11,134 14,947
	444,390 731,727

5.5.2 During the year, the Group received advance funding (wholly or predominantly for working capital or research and development expenditures) on its expected annual R&D rebate from Radium Capital. Refer key terms below:

Amounts	For 30 June 2025, $433K has been drawn down.
Final maturity date	30 November 2025.
Repayment	Skin Elements has the option to repay earlier without penalties.
Interest rate	15% per annum, with default rate of 18% if repayment is later than 30 November 2025.
Security	Secured against the R&D refund receivable from the ATO

5.5.3 Accounting policy

Borrowings are initially recognised at fair value, net of transaction costs, and subsequently measured at amortised cost using the effective interest method. The difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the term of the borrowing.

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that drawdown is probable. Where drawdown is not probable, fees are capitalised as a prepayment for liquidity services and amortised over the facility period.

Borrowings are classified as non-current when the Group has an unconditional right to defer settlement for at least 12 months after the reporting date; otherwise, they are classified as current.

PAGE | 27

ANNUAL REPORT 30 June 2025

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ABN 90 608 047 794

Notes to the consolidated financial statements

for the year ended 30 June 2025

Note 5 Financial assets and financial liabilities (cont.)

5.5 Borrowings (cont.)

5.5.3 Accounting policy (cont.)

Borrowings are derecognised when the contractual obligations are discharged, cancelled or expire. The difference between the carrying amount of a liability extinguished or transferred and the consideration paid, including non-cash assets transferred or liabilities assumed, is recognised in profit or loss.

Where borrowings are settled through the issue of equity instruments (debt-for-equity swap), the gain or loss is measured as the difference between the carrying amount of the liability and the fair value of equity instruments issued, and recognised in profit or loss.

Note 6 Non-financial assets and financial liabilities

6.1 Inventories	2025	2024
	$	$

Finished goods	-	31,908
	-	31,908

6.1.1 Accounting policy

Raw materials, stores, work in progress and finished goods are carried at the lower of cost and net realisable value.

Cost comprises direct materials, direct labour and a proportion of variable and fixed production overheads, allocated on the basis of normal operating capacity. Purchased inventory costs are recorded net of rebates and discounts. Costs are assigned to inventory using the weighted average cost method.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and costs necessary to make the sale.

Write-downs to net realisable value are recognised as an expense in the period in which they occur.

Intangible assets	2025 2024
	$ $

SE Formula™ Accumulated amortisation Accumulated impairment 6.2.1a Website development costs Accumulated amortisation Accumulated impairment Total intangibles	9,859,296 9,859,296 (2,379,486) (2,379,486) (7,479,810) (7,479,810)
	- -
	55,410 55,410 (45,230) (45,230) (10,180) (10,180)
	- -
	- -

6.2 Intangible assets

6.2.1 Key estimates

a. Impairment of intangible assets

The Group assesses intangible assets for impairment at each reporting date in accordance with AASB 136. This involves evaluating conditions specific to the asset that may indicate a change in recoverable amount.

An impairment charge of $7,489,990 was recognised in a prior period against the Group’s intellectual property assets, reducing their carrying amount to nil. The impairment was based on a value-in-use discounted cash flow model, reflecting limited sales history and insufficient contracted sales to support reliable cash flow forecasts. At the current reporting date, these conditions persist and the carrying value remains at nil.

The key estimate relates to the potential reversal of impairment. Under AASB 136, reversals are permitted when there is an indication that the recoverable amount of an asset has increased since the last impairment was recognised. A reversal would be recognised in profit or loss to the extent that the revised carrying amount does not exceed the amount that would have been determined (net of amortisation) had no impairment been recognised previously.

Accordingly, if commercialisation of the intellectual property proves successful and contracted sales provide reliable evidence of positive future cash inflows, some or all of the prior impairment may be reversed.

PAGE | 28

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ANNUAL REPORT 30 June 2025

ABN 90 608 047 794

Notes to the consolidated financial statements

for the year ended 30 June 2025

Note 6 Non-financial assets and financial liabilities (cont.)

6.2 Intangible assets (cont.)

b. Amortisation rates

The Group has assessed the effective life of its SE Formula™ intangible asset (comprising Soléo Organics, McArthur Skincare , Elizabeth Jane Natural Cosmetics , and Invisi® Shield Hand Sanitiser formulas and technologies). This assessment considers industry practice, expected product life cycles, and internal knowledge of the underlying markets. The amortisation rate represents management’s estimate of the period over which the assets are expected to generate economic benefits, but actual results may differ. The effective life will continue to be reviewed at each reporting date.

6.2.2 Accounting policies

a. Intangible assets acquired separately

Separately acquired intangible assets are recorded at cost less accumulated amortisation and impairment. Amortisation is charged on a straight-line basis over the estimated useful lives. Useful lives and amortisation methods are reviewed annually, with changes accounted for prospectively.

i. Formula and technology

Skin Elements formula and technology (hereafter SE Formula™ ), comprises the following, which utilise the same propriety formula in their ingredients: Soléo Organics formula and technology; PapayaActivs Skincare formula and technology; Elizabeth Jane Natural Cosmetics formula and technology; and Invisi® Shield SuprCuvr Disinfectant. Formula and technology are carried at cost less accumulated amortisation and impairment. Where acquired in a business combination, they are recognised at fair value at the acquisition date. These assets are considered to have finite useful lives.

ii. Software

Costs incurred in maintaining software are expensed as incurred. Costs directly attributable to the development or improvement of identifiable and unique software controlled by the Group are capitalised when the recognition criteria for internally generated intangibles are met.

b. Capitalising development costs of formula and technology and software

Research expenditure is expensed as incurred. Development expenditure on formula, technology, and software is capitalised only when all of the following can be demonstrated:

==> picture [11 x 10] intentionally omitted <==

technical feasibility of completing the asset for use or sale;

==> picture [11 x 10] intentionally omitted <==

intention and ability to complete and use or sell the asset;

==> picture [11 x 10] intentionally omitted <==

evidence that the asset will generate probable future economic benefits;

==> picture [11 x 10] intentionally omitted <==

availability of resources to complete the development and use or sell the asset; and ability to reliably measure the attributable expenditure.

==> picture [11 x 10] intentionally omitted <==

the ability to measure reliably the expenditure attributable to the intangible asset during its development.

Capitalised development costs are measured at cost less accumulated amortisation and impairment, consistent with separately acquired intangible assets. Expenditure that does not meet the recognition criteria is expensed as incurred.

c. Intangible assets acquired in a business combination Intangible assets acquired in a business combination, other than goodwill, are recognised at fair value at the acquisition date. Subsequent measurement is at cost less amortisation and impairment for finite life assets, or at cost less impairment for indefinite life assets. Derecognition gains or losses are recognised in profit or loss as the difference between disposal proceeds and carrying amount. Useful lives and amortisation methods are reviewed annually, with changes accounted for prospectively.

d. Subsequent measurement

Amortisation commences when development is sufficiently advanced for products to be produced in commercial quantities. The SE Formula™ has been assessed as meeting this test and is amortised on a straight-line basis over an estimated useful life of 25 years. The useful life of each intangible asset is reviewed regularly.

	2025	2024
	Years	Years
SE Formula™	25	25
Website development costs	5	5

PAGE | 29

ANNUAL REPORT 30 June 2025

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ABN 90 608 047 794

Notes to the consolidated financial statements

for the year ended 30 June 2025

Note 6 Non-financial assets and financial liabilities (cont.)

6.3	Other material accounting policies related to non-financial assets and liabilities
6.3.1	Impairment of non-financial assets
	The carrying amounts of the Group’s non-financial assets, other than deferred tax assets (see note 4.7), are reviewed at each
	reporting date to assess whether indicators of impairment exist. If such indicators are identified, the asset’s recoverable amount
	is estimated. Certain assets are subject to annual impairment testing irrespective of indicators.
	The recoverable amount is the higher of fair value less costs of disposal and value-in-use. Recoverable amounts are determined
	for individual assets, unless the asset does not generate largely independent cash inflows, in which case the assessment is made
	at the level of the cash-generating unit (CGU). An impairment loss is recognised when the carrying amount of an asset or CGU
	exceeds its recoverable amount.
	Value-in-use is determined by discounting estimated future cash flows using a pre-tax discount rate that reflects current market
	assessments of the time value of money and the risks specific to the asset. Impairment losses are recognised in profit or loss in
	the expense category consistent with the function of the impaired asset, unless the asset is carried at a revalued amount, in
	which case the impairment is treated as a revaluation decrease.
	At each reporting date, the Group also considers whether previously recognised impairment losses should be reversed. A
	reversal is recognised if there has been a change in the estimates used to determine the recoverable amount since the last
	impairment. The carrying amount of an asset is increased to its recoverable amount, subject to not exceeding the carrying
	amount that would have been determined (net of depreciation) had no impairment been recognised. Reversals are recognised
	in profit or loss, except where the asset is measured at a revalued amount, in which case the reversal is treated as a revaluation
	increase. Future depreciation charges are adjusted prospectively to allocate the asset’s revised carrying amount over its
	remaining useful life.
6.3.2	Leases
	The Group recognises a lease liability and a corresponding right-of-use asset at the commencement date of a lease, being the
	date that the leased asset is available for use by the Group.
	The Group has elected not to recognise right-of-use assets and lease liabilities for:
	short-term leases (lease terms of 12 months or less without a purchase option); and
	leases of low-value assets.
	a. Right of Use Asset
	Right-of-use assets are initially measured at cost, comprising
	the initial measurement of the lease liability;
	lease payments made at or before commencement less lease incentives received;
	initial direct costs; and
	estimated costs to dismantle, remove or restore the leased asset costs.
	Subsequent to initial recognition, right-of-use assets are depreciated on a straight-line basis over the shorter of the lease
	term and the asset’s useful life, and adjusted for impairment or for remeasurement of the related lease liability
	b. Lease liabilities
	Lease liabilities are initially measured at the present value of lease payments over the lease term, discounted using the
	interest rate implicit in the lease or, if that cannot be readily determined, the Group’s incremental borrowing rate. Lease
	payments include:
	fixed payments (including in-substance fixed payments) less lease incentives receivable;
	variable lease payments based on an index or rate;
	amounts expected to be payable under residual value guarantees;
	the exercise price of purchase options reasonably certain to be exercised; and
	penalties for termination if the lease term reflects exercising such an option.
	Lease liabilities are subsequently measured at amortised cost using the effective interest method, increased for interest
	expense and reduced by lease payments made. Liabilities are remeasured when future lease payments change due to an
	index or rate, residual value guarantees, or changes in the assessment of purchase, extension or termination options.
	Corresponding adjustments are made to the right-of-use asset, or recognised in profit or loss if the carrying amount of the
	right-of-use asset has been reduced to zero.
	Variable lease payments that are not based on an index or rate are expensed in the period in which the event or condition
	that triggers thepayment occurs.

PAGE | 30

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ANNUAL REPORT 30 June 2025

ABN 90 608 047 794

Notes to the consolidated financial statements

for the year ended 30 June 2025

Note 7 Equity

7.1 Issued capital Note	2025 2024	2025	2024
	No. No.	$	$

Fully paid ordinary shares 1,049,714,115 563,986,095 7.1.1 Ordinary shares 2025 No. 2024 No. At the beginning of the year 563,986,095 543,986,095 Shares issued during the year: 01.11.23_Placement_ - 20,000,000 04.11.24_Debt for equity_ 18.2.1b 166,666,665 - 04.12.24_Class A performance_ rights converted 7.4.1 100,000,000 - 07.03.25_Rights issue_ 171,230,552 - 13.03.25_Oversubscriptions_ 47,830,803 - Prior period applications reversed - - Share issue transaction costs - - At end of the year 1,049,714,115 563,986,095	1,049,714,115 563,986,095	25,868,692	24,444,454
	2025 No. 2024 No.	2025	2024 $
		$
		24,444,454	24,244,454 200,000 - - - - - -

		-
		500,000
		380,000

		513,692
		143,492

		(26,113)
		(86,833)
	1,049,714,115 563,986,095	25,868,692	24,444,454

a. Ordinary shares entitle holders to dividends and, on winding up, to a proportionate share of the Company’s residual assets according to the number and amounts paid on the shares held. Holders have one vote on a show of hands and one vote per share on a poll. Ordinary shares have no par value and the Company has no authorised capital.

7.1.2 Treasury shares Note	2025 2024
	No. No.

At beginning of the year At end of the year	25,500,000 25,500,000
	25,500,000 25,500,000

a. Treasury shares are ordinary shares issued as collateral shares for nil consideration.

7.1.3 Accounting policy

Ordinary shares are classified as equity and recorded at the fair value of consideration received, net of incremental costs directly attributable to the issue, and net of any related income tax benefit. Ordinary shares do not carry any special rights or restrictions and rank equally with respect to the Company’s residual interest in profits and net assets.

7.2 Reserves	2025 2024
	$ $

7.2.1 Summary of share-based payment reserve Options 7.3 Performance rights 7.4	335,827 335,827 - -
	335,827 335,827

7.2.2 Share-based payment reserve

The share-based payment reserve records the value of options and performance rights issued by the Company to its employees or consultants.

PAGE | 31

ANNUAL REPORT 30 June 2025

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ABN 90 608 047 794

Notes to the consolidated financial statements

for the year ended 30 June 2025

Note 7 Equity(cont.)
7.3 Options Note	2025 2024	2025	2024
	No. No.	$	$
Options on issue 7.3.1 Options movement during the year: At the beginning of the year 01.11.23_Free attaching to_ Placement shares 15.03.24_Expiration of LDA_ options 07.03.25_Free attaching to the_ rights issue 13.03.25_Free attaching to_ oversubscriptions At end of the year Comprising the following options: Unlisted  $0.05 options exp. 31.10.25  $0.01 options exp. 21.02.28 Listed  $0.025 options exp. 31.05.26	410,412,553 191,351,198	335,827	335,827
	2025 No. 2024 No.	2025	2024 $
		$
	191,351,198 197,351,198 - 20,000,000 - (26,000,000) 171,230,552 - 47,830,803 -	335,827	335,827 - - - -
		-

		-

		-

		-

	410,412,553 191,351,198		335,827
		335,827
	58,000,000 58,000,000 219,061,355 - 133,351,198 133,351,198
	410,412,553 191,351,198

7.4 Performance rights	2025 2024	2025	2024
	No. No.	$	$
Performance rights 7.4.1 Movement during the year: At the beginning of the year Amortisation of rights Derecognition of rights not achieved_(in profit and loss)_ Cancellation of rights Issue of Class A rights Issue of Class B rights Class A performance rights converted 7.1.1 Historically lapsed rights transferred within equity At end of the year	62,000,000 62,000,000	-	-
	2025 No. 2024 No.	2025	2024 $
		$
	62,000,000 209,000,000 - - - - (62,000,000) -		488,871 235,226 (511,584) - - - - (212,513)
		-
		-
		-

		-
	100,000,000 -	380,000
	62,000,000 - (100,000,000) - (147,000,000)	-

		(380,000)
		-

	62,000,000 62,000,000	-	-

PAGE | 32

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ANNUAL REPORT 30 June 2025

ABN 90 608 047 794

Notes to the consolidated financial statements

for the year ended 30 June 2025

SECTION B. RISK

This section of the notes discusses the Group’s exposure to various risks and shows how these could affect the Group’s financial position and performance.

Note 8 Financial risk management

This note provides information on the nature and extent of risks arising from the Group’s financial instruments, and its objectives, policies and processes for managing risk and capital. The Group’s financial instruments comprise deposits with banks, short-term investments, receivables, payables, borrowings (including convertible instruments) and leases. The Group does not trade or speculate in financial instruments or derivatives. A summary of financial assets and liabilities, measured in accordance with AASB 9, is presented below.:

	Floating interest rate Fixed interest rate Non- interest bearing 2025 Total Floating interest rate Fixed interest rate Non- interest bearing 2024 Total
	$ $ $ $ $ $ $ $
Financial assets Cash and cash equivalents Trade and other receivables Total financial assets Financial liabilities Trade and other payables Borrowings Total financial liabilities Net financial assets / (liabilities)	59,648 - - 59,648 115,071 - - 115,071 - - 653,197 653,197 - - 1,258,884 1,258,884
	59,648 - 653,197 712,845 115,071 - 1,258,884 1,373,955
	- - 2,212,883 2,212,883 - - 2,344,019 2,344,019 - 444,390 - 444,390 - 731,727 - 731,727
	- 444,390 2,212,883 2,657,273 - 731,727 2,344,019 3,075,746
	59,648 (444,390) (1,559,686) (1,944,428) 115,071 (731,727) (1,085,135) (1,701,791)

8.1 Financial risk management policies

The Board oversees the Group’s risk management framework, which is designed to assist in meeting financial targets while minimising adverse effects on performance. Risk management policies are approved and reviewed regularly and address credit risk, liquidity requirements, and market risk. Senior executives monitor financial risk exposures in light of current economic conditions and forecasts.

8.2 Specific financial risk exposures and management

The Group is exposed to credit risk, liquidity risk and market risk through its financial instruments.

The Board has overall responsibility for establishing and monitoring the risk management framework. Given the Group’s size and complexity, a formalised risk management system has not been adopted. Instead, the Board approves all expenditure, remains closely involved with operations, and addresses risk issues directly at Board meetings. Operational and compliance risk management processes are also in place and have been assessed as effective.

8.2.1 Credit risk

Credit risk is the risk of financial loss if a counterparty fails to meet its contractual obligations. The Group’s exposure arises primarily from cash at bank, short-term deposits and receivables.

Credit risk is managed by:

==> picture [11 x 10] intentionally omitted <==

dealing only with creditworthy counterparties;

==> picture [11 x 10] intentionally omitted <==

monitoring the financial stability of clients and counterparties;

==> picture [11 x 10] intentionally omitted <==

applying credit terms generally ranging from prepaid/cash on delivery up to 60 days (longer terms apply under specific contracts); and

==> picture [11 x 10] intentionally omitted <==

establishing an allowance for expected credit losses on receivables.

a. Credit risk exposures

The Group’s maximum credit risk exposure is limited to the carrying amount of financial assets (net of provisions) as disclosed in the statement of financial position and notes. There are no significant concentrations of credit risk to individual customers, industry sectors or regions. Surplus funds are invested only with reputable Australian financial institutions in accordance with Board policy.

b. Impairment losses

Impairment losses are recognised against receivables when recovery is doubtful. Amounts considered irrecoverable are written off directly. Trade and other receivables that are neither past due nor impaired are considered to be of high credit quality. The ageing of the Group's trade and other receivables at reporting date was as follows:

PAGE | 33

ANNUAL REPORT 30 June 2025

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ABN 90 608 047 794

Notes to the consolidated financial statements

for the year ended 30 June 2025

Note 8 Financial risk management (cont.)

Trade receivables Not past due to 30 days Past due 31 days to 90 days Past due greater than 90 days Other receivables Not past due Total -	Past due but not
	Gross Impaired Net impaired
	2025 2025 2025 2025
	$ $ $ $

	2,536 - 2,536 -
	1,195 - 1,195 1,195
	13,563 - 13,563 13,563
	17,294 - 17,294 14,758

	635,903 - 635,903 -
	653,197 - 653,197 14,758

8.2.2 Liquidity risk

Liquidity risk is the risk that the Group will be unable to meet its financial obligations as they fall due. The Group’s objective is to maintain sufficient liquidity to meet liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or reputational damage.

Responsibility for liquidity risk management rests with the Board, which has established a framework to manage the Group’s short, medium, and long-term funding requirements. The Group manages liquidity risk by:

==> picture [11 x 10] intentionally omitted <==

preparing forward looking cash flow analysis in relation to its operating, investing, and financing activities;

==> picture [11 x 10] intentionally omitted <==

maintaining a reputable credit profile;

==> picture [11 x 10] intentionally omitted <==

managing credit risk related to financial assets;

==> picture [11 x 10] intentionally omitted <==

only investing surplus cash with major financial institutions; and

==> picture [11 x 10] intentionally omitted <==

comparing the maturity profile of financial liabilities with the realisation profile of financial assets.

The Group typically ensures sufficient cash to meet operational expenses and service financial obligations for at least 60 days. This excludes the potential impact of extreme and unpredictable events such as natural disasters.

The Group’s financial liabilities comprise trade and other payables, which are non-interest bearing and generally payable within 60 days of the reporting date.

==> picture [10 x 10] intentionally omitted <==

Contractual Maturities

The following are the contractual maturities of financial assets and liabilities of the Group:

Within 1 Year	Greater Than 1 Year	Total
2025 $ 2024 $	2025 $ 2024 $	2025 $ 2024 $
2,212,883 2,344,019 444,390 731,727	- - - -	2,212,883 2,344,019 444,390 731,727
2,657,273 3,075,746	- -	2,657,273 3,075,746
59,648 115,071 653,197 1,258,884	- - - -	59,648 115,071 653,197 1,258,884
712,845 1,373,955	- -	712,845 1,373,955
(1,944,428) (1,701,791) - -		(1,944,428) (1,701,791)

Cash flows from financial instruments reflect management’s expectations and may differ from those disclosed. It is not expected that actual cash flows will occur significantly earlier, or at materially different amounts, than indicated in the maturity analysis.

PAGE | 34

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES ABN 90 608 047 794

ANNUAL REPORT 30 June 2025

Notes to the consolidated financial statements

for the year ended 30 June 2025

Note 8 Financial risk management (cont.)

8.2.3 Market risk

Market risk is the risk that changes in market prices, including interest rates, foreign exchange rates and equity prices, will affect the Group’s income or the value of its financial instruments. The Group’s objective is to manage exposures within acceptable parameters while optimising return.

The Group has minimal exposure to foreign exchange or commodity price risk and does not use derivative financial instruments to hedge market risks. There has been no material change in the Group’s market risk exposures or the way risks are managed since the prior year. The Group is not exposed to material foreign exchange risk or price risk

The Group is exposed to interest rate risk through borrowings at both fixed and floating rates. The risk is managed by maintaining an appropriate mix between fixed and floating rate debt. Details of the Group’s exposure to interest rate risk are set out in the liquidity risk disclosures.

8.2.4 Sensitivity Analyses

The Group is not subject to material market risk sensitivities.

8.2.5 Net Fair Values

a. Fair value estimation

The fair values of financial assets and liabilities are presented in the table in note 8 and compared with their carrying amounts in the statement of financial position. Fair value represents the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.

The Directors consider that the carrying amounts of financial assets and liabilities approximate their fair values, as trade receivables and payables are short-term in nature and measured net of impairment provisions.

Financial instruments whose carrying value is equivalent to fair value due to their nature include:

==> picture [11 x 10] intentionally omitted <==

Cash and cash equivalents;

==> picture [11 x 10] intentionally omitted <==

Trade and other receivables;

==> picture [11 x 10] intentionally omitted <==

Trade and other payables; and

==> picture [11 x 10] intentionally omitted <==

Derivative liabilities (recognised at fair value).

The methods and assumptions applied in determining fair values are set out in the accounting policies relevant to each asset or liability.

Note 9 Capital Management

9.1 Capital

The Group manages its capital to safeguard its ability to continue as a going concern, while maintaining an optimal debt– equity structure that reduces the cost of capital and maximises returns to shareholders and benefits to other stakeholders.

The capital structure comprises debt, cash and cash equivalents, and equity attributable to equity holders of the parent (issued capital, reserves and accumulated losses). None of the Group’s entities are subject to externally imposed capital requirements.

Operating cash flows are used to maintain and expand operations, meet routine expenditures such as tax, dividends and administration, and manage the Group’s gearing position. Gearing levels are reviewed regularly by the Board in line with target ratios, cost of capital, and the risks associated with each class of capital.

9.2 Working Capital

9.2 Working Capital
The working capital position of the Group was as follows: Note	2025 2024
	$ $

Cash and cash equivalents 5.1 Trade and other receivables 5.2 Inventories 6.1 Trade and other payables and current derivative liabilities 5.4 Borrowings 5.5 Working capital position	59,648 115,071 653,197 1,258,884 - 31,908 (2,212,883) (2,344,019) (444,390) (731,727)
	(1,944,428) (1,669,883)

PAGE | 35

ANNUAL REPORT

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

30 June 2025

ABN 90 608 047 794

Notes to the consolidated financial statements

for the year ended 30 June 2025

SECTION C. GROUP STRUCTURE

This section provides information which will help users understand how the Group structure affects the financial position and performance of the Group as a whole. In particular, there is information about:

(a) changes to the structure that occurred during the year as a result of business combinations and the disposal of a discontinued operation
(b) transactions with non-controlling interests, and
(c) interests in joint operations.

A list of material subsidiaries is provided in note 10.

Note 10 Interest in subsidiaries

The subsidiaries listed below have ordinary shares which are held directly by the Group and the proportion of ownership interest held equals the voting rights held by the Group. Investments in subsidiaries are accounted for at cost.

Entity name Class of	Percentage owned Country of
Shares	incorporation 2025 2024
SE Operations Pty Ltd Ord.	100 100 Australia
Note 11 Other material accounting policies related to group structure
11.1 Basis of consolidation
The consolidated financial statements incorporate the assets, liabilities and results of the Company and all subsidiaries
controlled by the Group. Control exists when the Group is exposed, or has rights, to variable returns from its involvement with
an entity and has the ability to affect those returns through its power over the entity.
Subsidiaries are consolidated from the date on which control is obtained until the date on which control ceases. The results of
subsidiaries acquired or disposed of during the year are included in the consolidated statement of profit or loss and other
comprehensive income from, or up to, the effective date of acquisition or disposal.
11.2 Subsidiaries
Subsidiaries are entities controlled by the Group. Their financial statements are included in the consolidated financial
statements from the date control commences until the date it ceases and, where necessary, are adjusted to align with Group
accounting policies.
Non-controlling interests are recognised either at fair value or at the proportionate share of net assets on initial recognition,
and are subsequently attributed their share of profit or loss and other comprehensive income. They are presented separately
in equity and in the statement of comprehensive income. Losses are allocated to non-controlling interests even if this results in
a deficit balance.
Options granted by the Company over its equity instruments to employees of subsidiaries are treated as a capital contribution.
The fair value of employee services received is recognised as an increase in investment in the subsidiary, with a corresponding
credit to equity.
A list of controlled entities is disclosed in 10_Interest in subsidiaries_of the financial statements.
11.3 Loss of control
On loss of control, the Group derecognises the subsidiary’s assets, liabilities, non-controlling interests and related equity
components. Any resulting gain or loss is recognised in profit or loss. Any retained interest is measured at fair value on the date
control is lost and subsequently accounted for in accordance with the level of influence retained.
11.4 Transactions eliminated on consolidation
All intra-group balances and transactions, and any unrealised profits or losses arising from intra-group transactions, are
eliminated inpreparingthe consolidated financial statements.

PAGE | 36

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ANNUAL REPORT

30 June 2025

ABN 90 608 047 794

Notes to the consolidated financial statements

for the year ended 30 June 2025

SECTION D. UNRECOGNISED ITEMS

This section of the notes provides information about items that are not recognised in the financial statements as they do not (yet) satisfy the recognition criteria.

In addition to the items and transactions disclosed below, there are also unrecognised tax amounts – see note 4 Income tax.

Note 12 Commitments

12.1 Capital commitments

The Group does not have any capital commitments (2024: $nil).

Note 13 Events subsequent to reporting date

There have been no matters or circumstances that has arisen after balance date that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial periods.

Note 14 Contingent liabilities

There are no contingent liabilities as at 30 June 2025 (30 June 2024: Nil).

PAGE | 37

ANNUAL REPORT 30 June 2025

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ABN 90 608 047 794

Notes to the consolidated financial statements

for the year ended 30 June 2025

SECTION E. OTHER INFORMATION

This section of the notes includes other information that must be disclosed to comply with the accounting standards and other pronouncements, but that is not immediately related to individual line items in the financial statements.

Note 15 Key Management Personnel compensation (KMP)

The names and positions of KMP are as follows:

==> picture [11 x 10] intentionally omitted <==

Directors

Peter Malone Executive Chairman
Filippo (Phil) Giglia Independent Non-Executive Director
Stuart Usher Independent Non-Executive Director

==> picture [11 x 10] intentionally omitted <==

Other key management

Leo Fung Chief Technical Advisor
Craig Piercy Chief Financial Officer

Information regarding individual directors and executives’ compensation and some equity instruments disclosures as required by the Corporations Regulations 2M.3.03 is provided in the Remuneration report table on page 10.

	Note	2025	2024
		$	$
Short-term employee benefits		793,782	793,782
Share-based payments	18.2.1a	380,000	(267,444)
	18.2.2a
Total		1,173,782	526,338

Note 16 Related party transactions

The Group may enter into service agreements with individuals, or entities associated with them, in the ordinary course of business. During the year, several entities associated with Directors and certain technical staff provided consulting services, resulting in transactions with the Group. All related party transactions are conducted on normal commercial terms and conditions, no more favourable than those available to other parties, unless otherwise stated.

Balances and transactions between the Company and its subsidiaries, being related parties, have been eliminated on consolidation and are not disclosed in this note. At reporting date, trade and other receivables and payables included the following balances with related parties:

	Payable Balance
Entity Nature of transactions KMP	2025 2024
	$ $
Boston Technology Management Pty Ltd Service Fees Peter Malone 220,164 360,462 Colosseum Securities Pty Ltd Director’s fee Filippo (Phil) Giglia 158,102 147,472 Spitfire Corporate Advisory Pty Ltd Director’s fee Stuart Usher 89,291 74,161 Geneva Partners Pty Ltd Company secretary fees Stuart Usher 57,750 24,750 Boston Technology Management Pty Ltd Service Fees Craig Piercy 286,419 335,086 Boston Technology Management Pty Ltd R&D Costs_(see a. below)_Craig Piercy, Peter Malone 673,503 816,199 Blackridge Pty Ltd Service Fees Leo Fung 191,630 221,558 Total 1,676,859 1,979,688

a. R&D Costs is provided by Boston Technology Management Pty Ltd for R&D project materials, formulations, testing, and R&D contractors and consultants. This amount was recognised as an expense the corresponding year.

b. KMP have confirmed they will not call upon balances owed until such time where the Company able to do so.

PAGE | 38

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ANNUAL REPORT 30 June 2025

ABN 90 608 047 794

Notes to the consolidated financial statements

for the year ended 30 June 2025

Note 17 Earnings per share (EPS) Note	2025 2024
	$ $

17.1 Reconciliation of loss to profit or loss Loss for the year Loss used in the calculation of basic and diluted EPS	(1,728,461) (2,161,283)
	(1,728,461) (2,161,283)

	2025 2024
	No. No.

17.2 Weighted average number of ordinary shares outstanding during the year used in calculation of basic EPS Weighted average number of dilutive equity instruments outstanding 17.5 17.3 Weighted average number of ordinary shares outstanding during the year used in calculation of basic EPS	787,339,882 557,264,784 N/A N/A
	787,339,882 557,264,784

17.4 Earnings per share	2025 2024
	₵ ₵
Basic EPS (cents per share) 17.5 Diluted EPS (cents per share) 17.5	(0.22) (0.39) N/A N/A

17.5 As at 30 June 2025 the Group has 410,412,553 unissued shares under options (2024: 191,351,198) and 62,000,000 performance shares on issue (2024: 62,000,000). The Group does not report diluted earnings per share on losses generated by the Group. During the year, the Group's unissued shares under option and performance shares were anti-dilutive.

17.6 Accounting policy

Basic EPS is calculated as net profit attributable to members of the parent, adjusted for the costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares outstanding during the period, adjusted for any bonus element.

Diluted EPS is calculated as net profit attributable to members of the parent, adjusted for the after-tax effect of dividends, interest and other income or expense changes arising from dilutive potential ordinary shares, divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element

Note 18 Share-based payments Note	2025 2024
	$ $

18.1 Share-based payments: Net recognised in profit and loss or (derecognised) as a contra expense 18.2.1a, 18.2.2a Recognised in net assets (payables) 18.2.1b Gross share-based payments	380,000 (276,358) 500,000 -
	880,000 (276,358)

18.2 Share-based payment arrangements in effect during the year

18.2.1 Issued during the current year

a. Director and KMP Performance Rights (2024)

At the Company's AGM held on 29 November 2024, shareholder approval was obtained to issue performance rights that will convert into shares pursuant to the Equity Incentive Plan.

These performance rights are issued to Peter Malone, Executive Chairman, Filippo (Phil) Giglia and Stuart Usher, nonexecutive directors, and key management Craig Piercy and Leo Fung and have been valued and issued on terms as detailed in the following and valued in accordance with 18.3.

PAGE | 39

ANNUAL REPORT 30 June 2025

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ABN 90 608 047 794

Notes to the consolidated financial statements

for the year ended 30 June 2025

Note 18 Share-based payments (cont.)

18.2 Share-based payment arrangements in effect during the year (cont.)

Class of Tranches of Performance Condition	Number ofperformance rights Performance
Performance Performance	Milestone Expiry Condition Peter Filippo (Phil) Stuart Usher Craig Piercy Leo Fung
Right Right	Date Date Satisfied Malone Giglia
A N/A Vested on issue date	50,000,000 - - 25,000,000 25,000,000 Vested Vested Yes
The Group receiving revenue
from product sales of:
B 1 $5,000,000 after 2.12.24	12,500,000 2,500,000 500,000 - - 31.12.27 4 years from No
	vesting date
B 2 $10,000,000 after 2.12.24	12,500,000 2,500,000 500,000 - - 31.12.27 4 years from No
	vesting date
B 3 $15,000,000 after 2.12.24	12,500,000 2,500,000 500,000 - - 31.12.27 4 years from No
	vesting date
B 4 $20,000,000 after 2.12.24	12,500,000 2,500,000 500,000 - - 31.12.27 4 years from No
	vesting date

Class B performance rights also require a service condition on continuing employment.

b. Settlement of liabilities

At the Company's AGM held on 29 November 2024, shareholder approval was obtained to issue shares in partsettlement of amounts owing to KMP and other parties as detailed below:

KMP or other party	Share issued Fixed share price	Value settled
	at notice date
Peter Malone	56,620,000 $0.003	$169,860
Filippo (Phil) Giglia	14,123,333 $0.003	$42,370
Stuart Usher	14,123,333 $0.003	$42,370
Craig Piercy	36,733,333 $0.003	$110,200
Leo Fung	36,733,333 $0.003	$110,200
Other parties	8,333,333 $0.003	$25,000
	166,666,665	$500,000

18.2.2 Issued in prior period, relating to comparative periods

a. Director and consultants’ performance rights (2022)

At the Company's AGM held on 26 April 2022, shareholder approval was obtained to issue performance rights that will convert into shares pursuant to the Equity Incentive Plan.

These performance rights were issued to Directors, Messrs Malone, Giglia and Christensen, and other KMP Messrs Piercy and Fung, and were issued and valued on terms as detailed below.

Class of Performance Right	Tranches of Performance Right	Performance Condition: The Company receiving revenue from product sales of	Peter Malone	Number Filippo (Phil) Giglia	of performance rights Lee Christensen Craig Piercy	of performance rights Lee Christensen Craig Piercy	Leo Fung	Milestone Date	Expiry Date	Performance Condition Satisfied
B	1	$25,000,000 after 1.01.22	12,500,000	2,500,000	500,000	-	-	31.12.27	3 years from	No
									vesting
B	2	$50,000,000 after 1.01.22	12,500,000	2,500,000	500,000	-	-	31.12.27	3 years from	No
									vesting
B	3	$75,000,000 after 1.01.22	12,500,000	2,500,000	500,000	-	-	31.12.27	3 years from	No
									vesting
B	4	$100,000,000 after 1.01.22	12,500,000	2,500,000	500,000	-	-	31.12.27	3 years from	No
									vesting

The Company determined there was a nil probability of the 2022 Class B performance rights meeting vesting conditions and accordingly derecognised prior accounting. In 2024, $253,226 was reversed as a contra-expense, allocated to Peter Malone ($189,698), Filippo Giglia ($37,940) and a former director ($7,588). A further $276,358 relating to amounts recognised in prior periods was also reversed, allocated to Peter Malone ($228,870), Filippo Giglia ($44,574) and a former director ($8,915).

PAGE | 40

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ANNUAL REPORT 30 June 2025

ABN 90 608 047 794

Notes to the consolidated financial statements

for the year ended 30 June 2025

Note 18 Share-based payments (cont.)

18.3 Fair value of rights granted during the year

Class	A	B	B	B
Methodology	Binomial Valuation methodology
Tranche	N/A	1	2	3	4
Grant date:	29.11.2024
Grant date share price:	$0.0038
Vesting date	04.12.2024	On achieving condition
Number of rights issued:	100,000,000	15,500,000	15,500,000	15,500,000	15,500,000
Expiry date	Vested	48 months
Probability	100%	0%	0%	0%	0%
Value per right	$0.0038	$0.0038	$0.0038	$0.0038	$0.0038
Fair values
Total fair value	$380,000 $nil $nil			$nil	$nil
Recognised in the year	$380,000 $nil $nil			$nil	$nil
Fair value of rights granted by KMP
Class	A	B
Tranche	N/A	1	2	3	4
Peter Malone
Number of rights issued	50,000,000	12,500,000	12,500,000	12,500,000	12,500,000
Fair value of rights recognised	$190,000	$nil	$nil	$nil	$nil
Leo Fung
Number of rights issued	25,000,000	Nil	Nil	Nil	Nil
Fair value of rights recognised	$95,000	$nil	$nil	$nil	$nil
Craig Piercy
Number of rights issued	25,000,000	Nil	Nil	Nil	Nil
Fair value of rights recognised	$95,000	$nil	$nil	$nil	$nil
Phil Giglia
Number of rights issued	Nil	2,500,000	2,500,000	2,500,000	2,500,000
Fair value of rights recognised	$nil	$nil	$nil	$nil	$nil
Stuart Usher
Number of rights issued	Nil	500,000	500,000	500,000	500,000
Fair value of rights recognised	$nil	$nil	$nil	$nil	$nil

18.3.1 Fair value of rights granted by KMP

PAGE | 41

ANNUAL REPORT 30 June 2025

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ABN 90 608 047 794

Notes to the consolidated financial statements

for the year ended 30 June 2025

Note 18 Share-based payments (cont.)

18.4 Movement in Company options share-based payment arrangements during the year

A summary of the movements of all Company options issued as share-based payments is as follows:

2025 2024	2025 2024	2025 2024
Number of Weighted Average Number of		Weighted Average
Options Exercise Price	Options	Exercise Price
38,000,000 $0.043	38,000,000 - - -	$0.043 - - -
- -
- -
- -
38,000,000 $0.043	38,000,000	$0.043
38,000,000 $0.043	38,000,000	$0.043
20,000,000 352,412,553 410,412,553	20,000,000 133,351,198
	191,351,198

a. The weighted average remaining contractual life of options outstanding at year end was 1.75 years (2024: 1.25 years).

b. The fair value of the options granted to employees is deemed to represent the value of the employee services received over the vesting period.

18.5 Fair value of options granted in prior period, remaining in effect

The fair value of the options granted to employees is deemed to represent the value of the employee services received over the vesting period.

18.6 Accounting policy

The Group may provide benefits to employees (including Directors) and consultants in the form of share-based payment transactions, whereby services are exchanged for shares or rights over shares.

18.6.1 Equity-settled transactions

The cost of equity-settled awards is measured at fair value on the grant date using an option pricing model (e.g. Binomial or Black-Scholes) that considers the exercise price, option term, share price at grant date, expected volatility, dividend yield, riskfree interest rate and non-vesting conditions. Other vesting conditions are not included in the fair value measurement.

The fair value is expensed over the vesting period with a corresponding increase in equity, based on the best estimate of the number of awards expected to vest. The cumulative expense is reassessed at each reporting date and adjusted for changes in expectations, less amounts already recognised.

18.6.2 Cash-settled transactions

For cash-settled awards, a liability is recognised and remeasured at each reporting date until settlement, using an option pricing model and the award terms. During the vesting period, the liability is measured at fair value multiplied by the expired portion of the vesting period; thereafter it equals the full fair value of the liability. All changes are recognised in profit or loss, and the ultimate cost is the cash paid to settle the liability.

18.6.3 Other provisions

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Market conditions are included in fair value measurement; therefore, awards subject to market conditions are considered to vest if all other conditions are satisfied.

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Modifications are accounted for at a minimum as if unmodified, with additional expense recognised for any increase in fair value.

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Cancellations are treated as accelerated vesting on the date of cancellation, with immediate recognition of any remaining expense. Replacement awards are treated as modifications.

18.7 Key estimate

The cost of equity-settled awards is measured by reference to the fair value of the equity instruments at the grant date. The fair value of options granted is determined using the Black-Scholes option pricing model, which requires the use of assumptions and estimates as inputs.

PAGE | 42

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ANNUAL REPORT 30 June 2025

ABN 90 608 047 794

Note 19 Parent entity disclosures

Skin Elements Limited is the ultimate parent entity of the Group. The Company did not enter into any related party trading transactions during the year

transactions during the year
19.1 Financial Position of Skin Elements Limited	2025 2024
	$ $

Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Net liabilities Equity Issued capital Reserve Accumulated losses Total equity
	59,387 147,004 - -
	59,387 147,004
	1,372,072 1,352,168 - -
	1,372,072 1,352,168
	(1,312,685) (1,205,164)
	27,603,356 26,179,124 675,488 675,488 (29,591,530) (28,059,776)
	(1,312,686) (1,205,164)

19.2 Financial performance of Skin Elements Limited	2025 2024
	$ $

Loss for the year Other comprehensive loss Total comprehensive loss
	(1,531,754) (156,640) - -
	(1,531,754) (156,640)

19.3 Guarantees, Commitments and contingent liabilities

The Company had no guarantees for subsidiary debts, no capital commitments (note 12.1), and no contingent liabilities as at 30 June 2025 (2024: none).

Note 20 Operating segments

20.1 Identification of reportable segments

The Group operates predominantly in the biotechnology industry as the developer of its proprietary SE Formula™ . Operating segments are identified with reference to internal management reports reviewed by the Board of Directors for resource allocation and performance assessment. Based on this reporting, and an evaluation of current and comparative activities, the Group has determined that it operates in a single reportable segment. Revenues are derived materially from Australia.

Note 21 Auditor's remuneration	2025 2024
	$ $

Remuneration of the auditor, BDO Audit Pty Ltd, for: Assurance services:  Auditing or reviewing the financial reports Non-assurance services:  Other – Research and development tax incentive	87,945 83,747 39,449 38,628
	127,394 122,375

PAGE | 43

ANNUAL REPORT

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES ABN 90 608 047 794

30 June 2025

Consolidated Entity Disclosure Statement

Entity name	Ownership	Type of Entity	Trustee, partner,	Country of	Australian
	interest		or participant in a	incorporation	resident for tax
	2025		joint venture		purposes
SE Operations Pty Ltd	100	Body corporate	N/A	Australia	Australian
The Company has not formed a tax consolidated group with		its wholly-owned Australian subsidiary
Basis of preparation

This Consolidated Entity Disclosure Statement ( CEDS ) has been prepared in accordance with the Corporations Act 2001 (Cth), reflecting the amendments to section 295(3A)(vi) and (vii) which clarify the definition of foreign resident as being an entity that is treated as a resident of a foreign country under the tax laws of that foreign country. These amendments apply for financial years beginning on or after 1 July 2024. The CEDS includes certain information for each entity that was part of the consolidated entity at the end of the financial year in accordance with AASB 10 Consolidated Financial Statements .

Determination of Tax Residency

Section 295 (3A) of the Corporation Acts 2001 defines tax residency as having the meaning in the Income Tax Assessment Act 1997. The determination of tax residency involves judgement as there are currently several different interpretations that could be adopted, and which could give rise to a different conclusion on residency. It should be noted that the definitions of ‘Australian resident’ and ‘foreign resident’ in the Income Tax Assessment Act 1997 are mutually exclusive. This means that if an entity is an ‘Australian resident’ it cannot be a ‘foreign resident’ for the purposes of disclosure in the CEDS.

In determining tax residency, the consolidated entity has applied the following interpretation:

Australian tax residency

The consolidated entity has applied current legislation and judicial precedent, including having regard to the Tax Commissioner's public guidance in Tax Ruling TR 2018/5.

PAGE | 44

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ANNUAL REPORT 30 June 2025

ABN 90 608 047 794

Directors’ declaration

The Directors of the Company declare that in the Directors' opinion:

The attached financial statements and notes, as set out on pages 14 to 43, are in accordance with the Corporations Act 2001 (Cth) including:
(a) complying with Accounting Standards, the Corporations Regulations 2001, and other mandatory professional reporting requirements; and
(b) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2025 and of its performance for the financial year ended on that date
Subject to the matters disclosed in note 1.1.3, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

Note 1.1.2 confirms that the financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board.

The Directors have been given the declarations by the chief executive officer and chief financial officer required by section 295A of the Corporations Act 2001 (Cth);

The Consolidation Entity Disclosure Statement on page 44 is true and correct as at 30 June 2025.

This declaration is signed in accordance with a resolution of the Directors made pursuant to section 295(5) of the Corporations Act 2001.

On behalf of the Directors

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PETER MALONE

Executive Chairman Dated this Tuesday, 30 September 2025

PAGE | 45

ANNUAL REPORT 30 June 2025

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ABN 90 608 047 794

Independent auditor’s report

PAGE | 46

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES ABN 90 608 047 794

ANNUAL REPORT 30 June 2025

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PAGE | 47

ANNUAL REPORT 30 June 2025

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES ABN 90 608 047 794

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PAGE | 48

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES ABN 90 608 047 794

ANNUAL REPORT 30 June 2025

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PAGE | 49

ANNUAL REPORT

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

30 June 2025

ABN 90 608 047 794

Corporate governance statement

The Board is responsible for establishing the Company’s corporate governance framework. In establishing its corporate governance framework, the Board has referred to the 4th edition of the ASX Corporate Governance Councils’ Corporate Governance Principles and Recommendations.

The Corporate Governance Statement discloses the extent to which the Company follows the recommendations. The Company will follow each recommendation where the Board has considered the recommendation to be an appropriate benchmark for its corporate governance practices. Where the Company’s corporate governance practices will follow a recommendation, the Board has made appropriate statements reporting on the adoption of the recommendation. In compliance with the “if not, why not” reporting regime, where, after due consideration, the Company’s corporate governance practices will not follow a recommendation, the Board has explained its reasons for not following the recommendation and disclosed what, if any, alternative practices the Company will adopt instead of those in the recommendation.

The Company’s governance-related documents can be found on its website at www.skinelementslimited.com/investors.html#cg.

PAGE | 50

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES ABN 90 608 047 794

ANNUAL REPORT 30 June 2025

Additional Information for Listed Public Companies

The following additional information is required by the Australian Securities Exchange in respect of listed public companies.

1 Capital as at 11 September 2024

a. Ordinary share capital

563,986,095 ordinary fully paid shares held by 1,112 shareholders. There are an additional 25,500,000 treasury shares held by LDA Capital (USA) as collateral shares.

b. Options over Unissued Shares

The Company has an additional 133,351,198 listed options and 58,000,000 unlisted options on issue in accordance with section 9.1 of the Directors' Report.

ASX Security Grant Date of Exercise Price	Number under
Code Date Expiry $	Option
SKNOD 05.2023 & 06.2023 31.05.2026 0.025 SKNAS 11.2022 & 02.2023 31.10.2025 0.050	113,351,198 58,000,000
	171,351,198

No person entitled to exercise the option has any right by virtue of the option to participate in any share issue of any other body corporate.

c. Performance Rights over Unissued Shares

	Class of Performance Condition Rights Milestone Date Expiry Date
	Right No.
	2022 Class B The Company receiving revenue from product sales of 15,500,000 31 Dec 2027 3 years from
	Tranche 1 $25M after 1.01.22 vesting date
	2022 Class B The Company receiving revenue from product sales of 15,500,000 31 Dec 2027 3 years from
	Tranche 2 $50M after 1.01.22 vesting date
	2022 Class B The Company receiving revenue from product sales of 15,500,000 31 Dec 2027 3 years from
	Tranche 3 $75M after 1.01.22 vesting date
	2022 Class B The Company receiving revenue from product sales of 15,500,000 31 Dec 2027 3 years from
	Tranche 4 $100M after 1.01.22 vestingdate
	62,000,000

(1) The 2022 Class B rights were derecognised due to not meeting conditions as described in note 18.2.2a of the financial statements.

d. Voting Rights

The voting rights attached to each class of equity security are as follows:

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Ordinary shares Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by proxy has one vote on a show of hands.

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Options Options do not entitle the holders to vote in respect of that equity instrument, nor participate in dividends, when declared, until such time as the options are exercised or performance shares convert and subsequently registered as ordinary shares.

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Performance Rights A Performance Right does not entitle a Holder to vote on any resolutions proposed at a general meeting of shareholders of the Company. A Performance Right does not entitle a Holder to any dividends. A Performance Right does not entitle the Holder to participate in the surplus profits or assets of the Company upon winding up of the Company. A Performance Right is not transferable.

e. Substantial Shareholders as at 11 September 2024

	Name Number of Ordinary % Held of Issued Ordinary
	Fully Paid Shares Held Capital
	ABC Brightred Pty Ltd 35,000,000 6.21
	Sovereign Empire Pty Ltd 31,743,116 5.63

PAGE | 51

ANNUAL REPORT 30 June 2025

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ABN 90 608 047 794

Additional Information for Listed Public Companies

f. Distribution of equity holders as at 11 September 2024
i. Ordinary shareholders

Category (size of holding)	Total Holders Units held % Held
1 – 1,000 34 4,479 0.00 1,001 – 5,000 42 177,566 0.03 5,001 – 10,000 213 1,842,769 0.33 10,001 – 100,000 432 18,104,940 3.22 100,001 – and over 391 543,856,341 96.41 1,112 563,986,095 99.99 Listed options (ASX:SKNOD) exercisable at $0.025 on or before 31 May 2026	34 4,479 0.00 42 177,566 0.03 213 1,842,769 0.33 432 18,104,940 3.22 391 543,856,341 96.41
	1,112 563,986,095 99.99
Category (size of holding)	Total Holders Units held % Held
1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 – and over	7 5,963 0.00 33 85,598 0.06 16 130,959 0.10 88 3,740,263 2.80 81 129,388,415 97.02
	225 133,351,198 99.98

ii. Listed options (ASX:SKNOD) exercisable at $0.025 on or before 31 May 2026

g. Unmarketable Parcels as at 11 September 2024

There were 688 shareholders who held less than a marketable parcel of shares, holding 16,829,754 shares.

h. On-Market Buy-Back

There is no current on-market buy-back.

i. Restricted Securities

The Company has currently no restricted securities.

j. 20 Largest Shareholders — Ordinary Shares as at 11 September 2024

	Rank Name	No. Held % Held
	1. ABC Brightred Pty Ltd	35,000,000 6.21
	2. Sovereign Empire Pty Ltd 3. Sharesies Australia Nominee Pty Limited 4. LKS Holdings WA Pty Ltd 5. Citicorp Nominees Pty Limited 6. Braunii Pty Ltd 7. Ozada Pty Ltd 8. Mr John Eugene Slisar 9. Sovereign Equities Pty Ltd 10. Bayroad Nominees Pty Ltd 11. Nabawa Pty Ltd 12. Mr Russell Wayne Allen 13. State Securities Pty Ltd 14. Ozada Pty Ltd 15. Clare Malone 16. Unique Choice International Pty Ltd 17. Mr Peter Harry Kaladis 18. Top Oceania International Limited 19. Nevile Superannuation Fund Pty Ltd 20. Kava Holdings Pty Ltd Total	31,743,116 5.63 28,855,557 5.12 25,259,022 4.48 24,536,782 4.35 20,000,000 3.55 17,598,348 3.12 16,490,000 2.92 12,320,354 2.18 12,000,000 2.13 8,250,000 1.46 7,400,000 1.31 7,166,667 1.27 6,733,420 1.19 6,266,668 1.11 5,500,000 0.98 5,300,000 0.94 5,254,636 0.93 5,000,000 0.89 5,000,000 0.89
		285,674,570 50.66

PAGE | 52

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES ABN 90 608 047 794

ANNUAL REPORT 30 June 2025

Additional Information for Listed Public Companies

k. 20 Largest Option holders (SKNOD)— Listed Options as at 11 September 2024

	Rank Name	No. Held % Held
	1. ABC Brightred Pty Ltd	35,000,000 26.25
	2. 708 Capital Pty Ltd 3. Australian Executor Trustees Limited 4. Sovereign Empire Pty Ltd 5. Braunii Pty Ltd 6. Bayroad Nominees Pty Ltd 7. Superhero Securities Limited 8. Dujon Holdings Pty Ltd 9. Mgold Pty Ltd 10. BNP Paribas Nominees Pty Ltd 11. Mr Kenneth Rayward 12. Blue Albatross Pty Ltd 13. Equities Services Pty Ltd 14. BNP Paribas Nominees Pty Ltd 15. LKS Holdings WA Pty Ltd 16. Mr Keith William Flynn 17. Comnet Managements Pty Ltd 18. Sovereign Equities Pty Ltd 19. Nabawa Pty Ltd 20. Keith Flynn Total	16,152,981 12.11 5,387,963 4.04 5,290,520 3.97 4,710,445 3.53 4,200,000 3.15 3,003,144 2.25 3,000,000 2.25 2,933,058 2.20 2,703,952 2.03 2,700,000 2.02 2,000,000 1.50 1,863,551 1.40 1,740,000 1.30 1,600,000 1.20 1,509,663 1.13 1,500,000 1.12 1,386,726 1.04 1,375,000 1.03 1,255,250 0.94
		99,312,253 74.46

l. Unquoted Securities Holders Holding More than 20% of the Class as at 11 September 2024

Note: The 2022 Class B rights were derecognised due to not meeting conditions as described in note 18.2.2a of the financial statements.

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2022 Class B Tranche 1 Performance Rights Holders

Name	No. Held % Held
Peter Malone	12,500,000 100.00
Sub-total Total 2022 Class B Tranche 1 Performance Rights 2022 Class B Tranche 2 Performance Rights Holders	12,500,000 100.00
	12,500,000
Name	No. Held % Held
Peter Malone	12,500,000 100.00
Sub-total Total 2022 Class B Tranche 2 Performance Rights 2022 Class B Tranche 3 Performance Rights Holders	12,500,000 100.00
	12,500,000
Name	No. Held % Held
Peter Malone	12,500,000 100.00
Sub-total Total 2022 Class B Tranche 3 Performance Rights	12,500,000 100.00
	12,500,000

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2022 Class B Tranche 2 Performance Rights Holders

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2022 Class B Tranche 3 Performance Rights Holders

PAGE | 53

ANNUAL REPORT 30 June 2025

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

ABN 90 608 047 794

Additional Information for Listed Public Companies

	2022 Class B Tranche 4 Performance Rights Holders
	Name	No. Held % Held
	Peter Malone	12,500,000 100.00
	Sub-total Total 2022 Class B Tranche 4 Performance Rights SKNAS Unlisted Options (Exercise price: $0.05, Expiry Date: 31.10.2025)	12,500,000 100.00
		12,500,000
	Name	No. Held % Held
	Everblu Capital Corporate Pty Ltd	28,000,000 48.28
	Sub-total Total SKNAS Unlisted Options	28,000,000 48.28
		58,000,000

PAGE | 54

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES ABN 90 608 047 794

ANNUAL REPORT 30 June 2025

Additional Information for Listed Public Companies

2 The Company Secretary is Stuart Usher.

3 Principal registered office

As disclosed in the Corporate directory on page i of this Annual Report.

4 Registers of securities

As disclosed in the Corporate directory on page i of this Annual Report.

5 Stock exchange listing

Quotation has been granted for all the ordinary shares of the Company on all Member Exchanges of the Australian Securities Exchange Limited, as disclosed in the Corporate directory on page i of this Annual Report.

PAGE | 55

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1255A Hay Street West Perth, Western Australia 6005 Australia P 08 6311 1900 F 08 6311 1999

AI assistant

SKIN ELEMENTS LIMITED — Annual Report 2025

65803_rns_2025-09-29_1bc92eee-c2d0-493e-95f0-91b96e59c19e.pdf

Corporate directory

Registered office

Share registry

Securities exchange

Contents

Directors’ report

1. Directors

2. Company secretary

3. Dividends paid or recommended

4. Significant changes in the state of affairs

5. Operating and financial review

5.1. Nature of operations and principal activities

5.2. Operations review

5.2.1. Development of SE Formula™

5.2.2. Eco Nurture Plant Bio-Stimulant Phase 3 commencing

Directors’ report

5.2.3. SuprCuvr disinfectant Phase 3 commencing

5.2.4. Soléo Organics Phase 3 commercialisation negotiations

5.2.5. PapayaActivs Phase 2 completion

5.2.6. Research and development ( R&D ) tax incentive grant income

5.2.7. Rights Issue

5.2.8. Performance Rights

Directors’ report

5.2.9. Repayment of Borrowings

5.3. Financial Review

5.3.1. Key profit and loss measures

5.3.2. Key net asset measures

Directors’ report

Directors’ report

5.8. Environmental regulations

6. Information relating to the Directors

7. Meetings of directors and committees

8. Indemnifying officers or auditor

8.1. Indemnification

8.2. Insurance premiums

9. Options

9.1. Unissued shares under option

9.2. Shares issued on exercise of options

10. Auditor's independence and non-audit services

10.1. Auditor independence

10.2. Non-audit services

Directors’ report

11. Proceedings on behalf of the Company

12. Remuneration report (audited)

12.2. Principles used to determine the nature and amount of remuneration

12.2.1. Remuneration Policy

Directors’ report

12. Remuneration report (audited)

12.2.2. Remuneration structure

a. Non-Executive Directors – Mr Filippo (Phil) Giglia and Mr Stuart Usher

b. Executive Directors and other Senior Executives

12.2.3. Performance-based remuneration – Short-term and long-term incentive structure

a. Short-term incentives

b. Long-term incentives

12.2.4. Service agreements

Directors’ report

12. Remuneration report (audited)

12.2.5. Engagement of Remuneration Consultants

12.2.6. Relationship between Remuneration of KMP and Earnings

12.2.7. Voting and comments made at the Company’s 2023 and 2024 Annual General Meeting (AGM)

Directors’ report

12. Remuneration report (audited)

12.3. KMP remuneration

12.4. Share-based compensation

12.4.1. Employee Incentive Plan

Directors’ report

12. Remuneration report (audited)

12.4.2. As at 30 June 2025 the Company had the following securities on issue/lapse in connection with KMP share-based payments:

12.5. KMP equity holdings

12.5.1. Fully paid ordinary shares in Skin Elements Limited held by each KMP and their related entities at 30 June 2025

12.5.2. Options in Skin Elements Limited held by each KMP and their related entities at 30 June 2025

Directors’ report

12. Remuneration report (audited)

12.5.3. Performance Rights in Skin Elements Limited held by each KMP and their related entities at 30 June 2025

12.6. Other Equity-related KMP Transactions

12.7. Other transactions with KMP and or their related parties

END OF REMUNERATION REPORT

SKIN ELEMENTS LIMITED Annual Report 2025